Correlation Between TC BioPharm and American Rebel

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

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

Diversification Opportunities for TC BioPharm and American Rebel

0.18

Correlation Coefficient

TC BioPharm  American Rebel

Average diversification

The 3 months correlation between TCBPW and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TC BioPharm plc and American Rebel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Rebel Holdings 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 plc are associated (or correlated) with American Rebel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Rebel Holdings has no effect on the direction of TC BioPharm i.e., TC BioPharm and American Rebel go up and down completely randomly.

Pair Corralation between TC BioPharm and American Rebel

Assuming the 90 days horizon TC BioPharm plc is expected to generate 1.43 times more return on investment than American Rebel. However, TC BioPharm is 1.43 times more volatile than American Rebel Holdings. It trades about 0.04 of its potential returns per unit of risk. American Rebel Holdings is currently generating about -0.12 per unit of risk. If you would invest  2.00  in TC BioPharm plc on September 5, 2024 and sell it today you would lose (0.50) from holding TC BioPharm plc or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

TC BioPharm plc  vs.  American Rebel Holdings

TC BioPharm plc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TC BioPharm plc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, TC BioPharm showed solid returns over the last few months and may actually be approaching a breakup point.

American Rebel Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Rebel Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, American Rebel showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TC BioPharm and American Rebel

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

The idea behind TC BioPharm plc and American Rebel 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.