Can any of the company-specific risk be diversified away by investing in both Asensus Surgical and Tivic Health 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 Asensus Surgical and Tivic Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asensus Surgical and Tivic Health Systems, you can compare the effects of market volatilities on Asensus Surgical and Tivic Health 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 Asensus Surgical with a short position of Tivic Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asensus Surgical and Tivic Health.
Diversification Opportunities for Asensus Surgical and Tivic Health
The 3 months correlation between Asensus and Tivic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Asensus Surgical and Tivic Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tivic Health Systems and Asensus Surgical 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 Asensus Surgical are associated (or correlated) with Tivic Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tivic Health Systems has no effect on the direction of Asensus Surgical i.e., Asensus Surgical and Tivic Health go up and down completely randomly.
Pair Corralation between Asensus Surgical and Tivic Health
Given the investment horizon of 90 days Asensus Surgical is expected to generate 0.62 times more return on investment than Tivic Health. However, Asensus Surgical is 1.62 times less risky than Tivic Health. It trades about -0.05 of its potential returns per unit of risk. Tivic Health Systems is currently generating about -0.15 per unit of risk. If you would invest 30.00 in Asensus Surgical on March 6, 2024 and sell it today you would lose (6.58) from holding Asensus Surgical or give up 21.93% of portfolio value over 90 days.
Over the last 90 days Asensus Surgical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
Over the last 90 days Tivic Health Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.