Correlation Between TC BioPharm and Gemina Laboratories

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

Diversification Opportunities for TC BioPharm and Gemina Laboratories

-0.53

Correlation Coefficient

TC BioPharm  Gemina Laboratories

Excellent diversification

The 3 months correlation between TCBPW and Gemina is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding TC BioPharm plc and Gemina Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemina Laboratories 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 Gemina Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemina Laboratories has no effect on the direction of TC BioPharm i.e., TC BioPharm and Gemina Laboratories go up and down completely randomly.

Pair Corralation between TC BioPharm and Gemina Laboratories

Assuming the 90 days horizon TC BioPharm plc is expected to generate 7.98 times more return on investment than Gemina Laboratories. However, TC BioPharm is 7.98 times more volatile than Gemina Laboratories. It trades about 0.1 of its potential returns per unit of risk. Gemina Laboratories is currently generating about -0.35 per unit of risk. If you would invest  1.60  in TC BioPharm plc on September 24, 2024 and sell it today you would lose (0.09) from holding TC BioPharm plc or give up 5.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

TC BioPharm plc  vs.  Gemina Laboratories

TC BioPharm plc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TC BioPharm plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, TC BioPharm showed solid returns over the last few months and may actually be approaching a breakup point.

Gemina Laboratories

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gemina Laboratories are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Gemina Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TC BioPharm and Gemina Laboratories

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

The idea behind TC BioPharm plc and Gemina Laboratories 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.