Correlation Between THC Biomed and Revive Therapeutics

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

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

Diversification Opportunities for THC Biomed and Revive Therapeutics

0.0

Correlation Coefficient

THC Biomed  Revive Therapeutics

Pay attention - limited upside

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

Pair Corralation between THC Biomed and Revive Therapeutics

If you would invest  0.60  in Revive Therapeutics on December 20, 2024 and sell it today you would earn a total of  0.10  from holding Revive Therapeutics or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

THC Biomed Intl  vs.  Revive Therapeutics

THC Biomed Intl

Risk-Adjusted Performance

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 nearly stable fundamental drivers, THC Biomed is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Revive Therapeutics

Risk-Adjusted Performance

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 fragile basic indicators, Revive Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with THC Biomed and Revive Therapeutics

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

The idea behind THC Biomed Intl and Revive 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .