Correlation Between Iteos Therapeutics and TC BioPharm

Can any of the company-specific risk be diversified away by investing in both Iteos 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 Iteos 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 Iteos Therapeutics and TC BioPharm plc, you can compare the effects of market volatilities on Iteos 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 Iteos Therapeutics with a short position of TC BioPharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iteos Therapeutics and TC BioPharm.

Diversification Opportunities for Iteos Therapeutics and TC BioPharm

0.58

Correlation Coefficient

Iteos Therapeutics  TC BioPharm

Very weak diversification

The 3 months correlation between Iteos and TCBPW is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Iteos 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 Iteos 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 Iteos 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 Iteos Therapeutics i.e., Iteos Therapeutics and TC BioPharm go up and down completely randomly.

Pair Corralation between Iteos Therapeutics and TC BioPharm

Given the investment horizon of 90 days Iteos Therapeutics is expected to under-perform the TC BioPharm. But the stock apears to be less risky and, when comparing its historical volatility, Iteos Therapeutics is 10.53 times less risky than TC BioPharm. The stock trades about -0.15 of its potential returns per unit of risk. The TC BioPharm plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2.50  in TC BioPharm plc on September 23, 2024 and sell it today you would lose (0.99) from holding TC BioPharm plc or give up 39.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.67%
Values	Daily Returns

Iteos Therapeutics  vs.  TC BioPharm plc

Iteos Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iteos Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

TC BioPharm plc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TC BioPharm plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, TC BioPharm showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iteos Therapeutics and TC BioPharm

The main advantage of trading using opposite Iteos Therapeutics and TC BioPharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iteos 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 Iteos 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.