Correlation Between TC BioPharm and Antibe Therapeutics

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

Diversification Opportunities for TC BioPharm and Antibe Therapeutics

0.0

Correlation Coefficient

TC BioPharm  Antibe Therapeutics

Pay attention - limited upside

The 3 months correlation between TCBPW and Antibe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TC BioPharm plc and Antibe Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antibe Therapeutics 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 Antibe Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antibe Therapeutics has no effect on the direction of TC BioPharm i.e., TC BioPharm and Antibe Therapeutics go up and down completely randomly.

Pair Corralation between TC BioPharm and Antibe Therapeutics

Assuming the 90 days horizon TC BioPharm plc is expected to generate 16.33 times more return on investment than Antibe Therapeutics. However, TC BioPharm is 16.33 times more volatile than Antibe Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Antibe Therapeutics is currently generating about -0.03 per unit of risk. If you would invest  0.71  in TC BioPharm plc on October 2, 2024 and sell it today you would earn a total of  0.18  from holding TC BioPharm plc or generate 25.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.35%
Values	Daily Returns

TC BioPharm plc  vs.  Antibe Therapeutics

TC BioPharm plc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TC BioPharm plc are ranked lower than 2 (%) 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.

Antibe Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antibe Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Antibe Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TC BioPharm and Antibe Therapeutics

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

The idea behind TC BioPharm plc and Antibe Therapeutics 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.