Correlation Between TC BioPharm and Puma Biotechnology

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

By analyzing existing cross correlation between TC BioPharm Holdings and Puma Biotechnology, you can compare the effects of market volatilities on TC BioPharm and Puma Biotechnology 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 Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC BioPharm and Puma Biotechnology.

Diversification Opportunities for TC BioPharm and Puma Biotechnology

0.22

Correlation Coefficient

TC BioPharm  Puma Biotechnology

Modest diversification

The 3 months correlation between TCBP and Puma is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding TC BioPharm Holdings and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology 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 Holdings are associated (or correlated) with Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of TC BioPharm i.e., TC BioPharm and Puma Biotechnology go up and down completely randomly.

Pair Corralation between TC BioPharm and Puma Biotechnology

Given the investment horizon of 90 days TC BioPharm Holdings is expected to under-perform the Puma Biotechnology. In addition to that, TC BioPharm is 1.99 times more volatile than Puma Biotechnology. It trades about -0.45 of its total potential returns per unit of risk. Puma Biotechnology is currently generating about 0.2 per unit of volatility. If you would invest  279.00  in Puma Biotechnology on December 4, 2024 and sell it today you would earn a total of  56.00  from holding Puma Biotechnology or generate 20.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

TC BioPharm Holdings  vs.  Puma Biotechnology

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.

Puma Biotechnology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puma Biotechnology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Puma Biotechnology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TC BioPharm and Puma Biotechnology

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

The idea behind TC BioPharm Holdings and Puma Biotechnology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.