Correlation Between Revive Therapeutics and THC Biomed

Can any of the company-specific risk be diversified away by investing in both Revive Therapeutics and THC Biomed 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 Revive Therapeutics and THC Biomed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Revive Therapeutics and THC Biomed Intl, you can compare the effects of market volatilities on Revive Therapeutics and THC Biomed 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 Revive Therapeutics with a short position of THC Biomed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Revive Therapeutics and THC Biomed.

Diversification Opportunities for Revive Therapeutics and THC Biomed

-0.11

Correlation Coefficient

Revive Therapeutics  THC Biomed

Good diversification

The 3 months correlation between Revive and THC is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Revive Therapeutics and THC Biomed Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THC Biomed Intl and Revive 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 Revive Therapeutics are associated (or correlated) with THC Biomed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THC Biomed Intl has no effect on the direction of Revive Therapeutics i.e., Revive Therapeutics and THC Biomed go up and down completely randomly.

Pair Corralation between Revive Therapeutics and THC Biomed

Assuming the 90 days horizon Revive Therapeutics is expected to under-perform the THC Biomed. But the otc stock apears to be less risky and, when comparing its historical volatility, Revive Therapeutics is 2.61 times less risky than THC Biomed. The otc stock trades about -0.01 of its potential returns per unit of risk. The THC Biomed Intl is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2.50  in THC Biomed Intl on October 24, 2024 and sell it today you would lose (2.40) from holding THC Biomed Intl or give up 96.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Revive Therapeutics  vs.  THC Biomed Intl

Revive Therapeutics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Revive Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Revive Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

THC Biomed Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days THC Biomed Intl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Revive Therapeutics and THC Biomed

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

The idea behind Revive Therapeutics and THC Biomed Intl 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.