Correlation Between Excelsior Medical and TTY Biopharm

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

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

Diversification Opportunities for Excelsior Medical and TTY Biopharm

0.53

Correlation Coefficient

Excelsior Medical  TTY Biopharm

Very weak diversification

The 3 months correlation between Excelsior and TTY is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Medical Co and TTY Biopharm Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTY Biopharm and Excelsior 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 Excelsior Medical Co are associated (or correlated) with TTY Biopharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTY Biopharm has no effect on the direction of Excelsior Medical i.e., Excelsior Medical and TTY Biopharm go up and down completely randomly.

Pair Corralation between Excelsior Medical and TTY Biopharm

Assuming the 90 days trading horizon Excelsior Medical Co is expected to generate 0.51 times more return on investment than TTY Biopharm. However, Excelsior Medical Co is 1.98 times less risky than TTY Biopharm. It trades about 0.14 of its potential returns per unit of risk. TTY Biopharm Co is currently generating about 0.05 per unit of risk. If you would invest  8,600  in Excelsior Medical Co on December 28, 2024 and sell it today you would earn a total of  340.00  from holding Excelsior Medical Co or generate 3.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Excelsior Medical Co  vs.  TTY Biopharm Co

Excelsior Medical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Medical Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Excelsior Medical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

TTY Biopharm

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TTY Biopharm Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, TTY Biopharm is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Excelsior Medical and TTY Biopharm

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

The idea behind Excelsior Medical Co and TTY Biopharm Co 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 CEOs Directory module to screen CEOs from public companies around the world.