Correlation Between Haleon Plc and TC BioPharm

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

By analyzing existing cross correlation between Haleon plc and TC BioPharm Holdings, you can compare the effects of market volatilities on Haleon Plc 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 Haleon Plc with a short position of TC BioPharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and TC BioPharm.

Diversification Opportunities for Haleon Plc and TC BioPharm

-0.81

Correlation Coefficient

Haleon Plc  TC BioPharm

Pay attention - limited upside

The 3 months correlation between Haleon and TCBP is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and TC BioPharm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC BioPharm Holdings and Haleon Plc 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 Haleon plc 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 Holdings has no effect on the direction of Haleon Plc i.e., Haleon Plc and TC BioPharm go up and down completely randomly.

Pair Corralation between Haleon Plc and TC BioPharm

Considering the 90-day investment horizon Haleon plc is expected to generate 0.12 times more return on investment than TC BioPharm. However, Haleon plc is 8.45 times less risky than TC BioPharm. It trades about 0.06 of its potential returns per unit of risk. TC BioPharm Holdings is currently generating about -0.34 per unit of risk. If you would invest  964.00  in Haleon plc on December 27, 2024 and sell it today you would earn a total of  41.00  from holding Haleon plc or generate 4.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.67%
Values	Daily Returns

Haleon plc  vs.  TC BioPharm Holdings

Haleon plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Haleon plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Haleon Plc is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

TC BioPharm Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days TC BioPharm Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Haleon Plc and TC BioPharm

The main advantage of trading using opposite Haleon Plc and TC BioPharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc 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 Haleon plc and TC BioPharm Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.