Correlation Between TC BioPharm and Equillium
Can any of the company-specific risk be diversified away by investing in both TC BioPharm and Equillium 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 TC BioPharm and Equillium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TC BioPharm plc and Equillium, you can compare the effects of market volatilities on TC BioPharm and Equillium 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 TC BioPharm with a short position of Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC BioPharm and Equillium.
Diversification Opportunities for TC BioPharm and Equillium
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TCBPW and Equillium is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding TC BioPharm plc and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and TC BioPharm 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 TC BioPharm plc are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of TC BioPharm i.e., TC BioPharm and Equillium go up and down completely randomly.
Pair Corralation between TC BioPharm and Equillium
Assuming the 90 days horizon TC BioPharm plc is expected to generate 4.24 times more return on investment than Equillium. However, TC BioPharm is 4.24 times more volatile than Equillium. It trades about 0.04 of its potential returns per unit of risk. Equillium is currently generating about -0.16 per unit of risk. If you would invest 1.16 in TC BioPharm plc on September 13, 2024 and sell it today you would lose (0.29) from holding TC BioPharm plc or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
TC BioPharm plc vs. Equillium
Performance |
| Timeline |
| TC BioPharm plc |
| Equillium |
TC BioPharm and Equillium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TC BioPharm and Equillium
The main advantage of trading using opposite TC BioPharm and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC BioPharm position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.| TC BioPharm vs. Protagenic Therapeutics | TC BioPharm vs. bioAffinity Technologies Warrant | TC BioPharm vs. American Rebel Holdings | TC BioPharm vs. Alvotech Warrant |
| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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