Correlation Between Viveve Medical and AptarGroup

Can any of the company-specific risk be diversified away by investing in both Viveve Medical and AptarGroup 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 Viveve Medical and AptarGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Viveve Medical and AptarGroup, you can compare the effects of market volatilities on Viveve Medical and AptarGroup 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 Viveve Medical with a short position of AptarGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viveve Medical and AptarGroup.

Diversification Opportunities for Viveve Medical and AptarGroup

-0.66

Correlation Coefficient

Viveve Medical  AptarGroup

Excellent diversification

The 3 months correlation between Viveve and AptarGroup is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Viveve Medical and AptarGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AptarGroup and Viveve 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 Viveve Medical are associated (or correlated) with AptarGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AptarGroup has no effect on the direction of Viveve Medical i.e., Viveve Medical and AptarGroup go up and down completely randomly.

Pair Corralation between Viveve Medical and AptarGroup

Given the investment horizon of 90 days Viveve Medical is expected to under-perform the AptarGroup. In addition to that, Viveve Medical is 10.91 times more volatile than AptarGroup. It trades about -0.09 of its total potential returns per unit of risk. AptarGroup is currently generating about 0.09 per unit of volatility. If you would invest  9,696  in AptarGroup on February 26, 2024 and sell it today you would earn a total of  5,113  from holding AptarGroup or generate 52.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	21.5%
Values	Daily Returns

Viveve Medical  vs.  AptarGroup

Viveve Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viveve Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Viveve Medical is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

AptarGroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AptarGroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, AptarGroup is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Viveve Medical and AptarGroup

The main advantage of trading using opposite Viveve Medical and AptarGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viveve Medical position performs unexpectedly, AptarGroup 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 AptarGroup will offset losses from the drop in AptarGroup's long position.

The idea behind Viveve Medical and AptarGroup 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.