Correlation Between Protagenic Therapeutics and TC BioPharm
Can any of the company-specific risk be diversified away by investing in both Protagenic Therapeutics and TC BioPharm 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 Protagenic Therapeutics and TC BioPharm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Protagenic Therapeutics and TC BioPharm plc, you can compare the effects of market volatilities on Protagenic Therapeutics and TC BioPharm 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 Protagenic Therapeutics with a short position of TC BioPharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protagenic Therapeutics and TC BioPharm.
Diversification Opportunities for Protagenic Therapeutics and TC BioPharm
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Protagenic and TCBPW is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Protagenic Therapeutics and TC BioPharm plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC BioPharm plc and Protagenic Therapeutics 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 Protagenic Therapeutics are associated (or correlated) with TC BioPharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC BioPharm plc has no effect on the direction of Protagenic Therapeutics i.e., Protagenic Therapeutics and TC BioPharm go up and down completely randomly.
Pair Corralation between Protagenic Therapeutics and TC BioPharm
Assuming the 90 days horizon Protagenic Therapeutics is expected to under-perform the TC BioPharm. But the stock apears to be less risky and, when comparing its historical volatility, Protagenic Therapeutics is 5.15 times less risky than TC BioPharm. The stock trades about -0.5 of its potential returns per unit of risk. The TC BioPharm plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.91 in TC BioPharm plc on August 27, 2024 and sell it today you would lose (0.31) from holding TC BioPharm plc or give up 16.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 19.05% |
| Values | Daily Returns |
Protagenic Therapeutics vs. TC BioPharm plc
Performance |
| Timeline |
| Protagenic Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| TC BioPharm plc |
Protagenic Therapeutics and TC BioPharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Protagenic Therapeutics and TC BioPharm
The main advantage of trading using opposite Protagenic Therapeutics and TC BioPharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protagenic Therapeutics position performs unexpectedly, TC BioPharm 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 TC BioPharm will offset losses from the drop in TC BioPharm's long position.The idea behind Protagenic Therapeutics and TC BioPharm plc 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.| TC BioPharm vs. bioAffinity Technologies Warrant | TC BioPharm vs. American Rebel Holdings | TC BioPharm vs. Alvotech Warrant | TC BioPharm vs. Inspira Technologies Oxy |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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