Correlation Between Avita Medical and Vivos Therapeutics
Can any of the company-specific risk be diversified away by investing in both Avita Medical and Vivos 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 Avita Medical and Vivos Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avita Medical and Vivos Therapeutics, you can compare the effects of market volatilities on Avita Medical and Vivos 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 Avita Medical with a short position of Vivos Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avita Medical and Vivos Therapeutics.
Diversification Opportunities for Avita Medical and Vivos Therapeutics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avita and Vivos is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Avita Medical and Vivos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivos Therapeutics and Avita 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 Avita Medical are associated (or correlated) with Vivos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivos Therapeutics has no effect on the direction of Avita Medical i.e., Avita Medical and Vivos Therapeutics go up and down completely randomly.
Pair Corralation between Avita Medical and Vivos Therapeutics
Given the investment horizon of 90 days Avita Medical is expected to under-perform the Vivos Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Avita Medical is 1.39 times less risky than Vivos Therapeutics. The stock trades about -0.15 of its potential returns per unit of risk. The Vivos Therapeutics is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 283.00 in Vivos Therapeutics on September 20, 2024 and sell it today you would earn a total of 207.00 from holding Vivos Therapeutics or generate 73.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avita Medical vs. Vivos Therapeutics
Performance |
| Timeline |
| Avita Medical |
| Vivos Therapeutics |
Avita Medical and Vivos Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avita Medical and Vivos Therapeutics
The main advantage of trading using opposite Avita Medical and Vivos Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avita Medical position performs unexpectedly, Vivos 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 Vivos Therapeutics will offset losses from the drop in Vivos Therapeutics' long position.| Avita Medical vs. Clearpoint Neuro | Avita Medical vs. Sight Sciences | Avita Medical vs. Treace Medical Concepts | Avita Medical vs. Rxsight |
| Vivos Therapeutics vs. Avita Medical | Vivos Therapeutics vs. Inogen Inc | Vivos Therapeutics vs. Apyx Medical |
Check out your portfolio center.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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