Correlation Between Vivani Medical and Rani Therapeutics

Can any of the company-specific risk be diversified away by investing in both Vivani Medical and Rani Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vivani Medical and Rani Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vivani Medical and Rani Therapeutics Holdings, you can compare the effects of market volatilities on Vivani Medical and Rani Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vivani Medical with a short position of Rani Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivani Medical and Rani Therapeutics.

Diversification Opportunities for Vivani Medical and Rani Therapeutics

0.54

Correlation Coefficient

Vivani Medical  Rani Therapeutics

Very weak diversification

The 3 months correlation between Vivani and Rani is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vivani Medical and Rani Therapeutics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rani Therapeutics and Vivani Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vivani Medical are associated (or correlated) with Rani Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rani Therapeutics has no effect on the direction of Vivani Medical i.e., Vivani Medical and Rani Therapeutics go up and down completely randomly.

Pair Corralation between Vivani Medical and Rani Therapeutics

Given the investment horizon of 90 days Vivani Medical is expected to under-perform the Rani Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Vivani Medical is 2.5 times less risky than Rani Therapeutics. The stock trades about -0.19 of its potential returns per unit of risk. The Rani Therapeutics Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Rani Therapeutics Holdings on December 2, 2024 and sell it today you would lose (47.00) from holding Rani Therapeutics Holdings or give up 23.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Vivani Medical  vs.  Rani Therapeutics Holdings

Vivani Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivani Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Rani Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rani Therapeutics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Vivani Medical and Rani Therapeutics

The main advantage of trading using opposite Vivani Medical and Rani Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivani Medical position performs unexpectedly, Rani Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rani Therapeutics will offset losses from the drop in Rani Therapeutics' long position.

The idea behind Vivani Medical and Rani Therapeutics Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.