Correlation Between Helix BioPharma and Theratechnologies

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

By analyzing existing cross correlation between Helix BioPharma Corp and Theratechnologies, you can compare the effects of market volatilities on Helix BioPharma and Theratechnologies 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 Helix BioPharma with a short position of Theratechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Helix BioPharma and Theratechnologies.

Diversification Opportunities for Helix BioPharma and Theratechnologies

-0.08

Correlation Coefficient

Helix BioPharma  Theratechnologies

Good diversification

The 3 months correlation between Helix and Theratechnologies is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Helix BioPharma Corp and Theratechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theratechnologies and Helix BioPharma 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 Helix BioPharma Corp are associated (or correlated) with Theratechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theratechnologies has no effect on the direction of Helix BioPharma i.e., Helix BioPharma and Theratechnologies go up and down completely randomly.

Pair Corralation between Helix BioPharma and Theratechnologies

Assuming the 90 days trading horizon Helix BioPharma Corp is expected to under-perform the Theratechnologies. In addition to that, Helix BioPharma is 2.42 times more volatile than Theratechnologies. It trades about -0.02 of its total potential returns per unit of risk. Theratechnologies is currently generating about 0.06 per unit of volatility. If you would invest  165.00  in Theratechnologies on September 4, 2024 and sell it today you would earn a total of  17.00  from holding Theratechnologies or generate 10.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Helix BioPharma Corp  vs.  Theratechnologies

Helix BioPharma Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helix BioPharma Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Theratechnologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Theratechnologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Theratechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Helix BioPharma and Theratechnologies

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

The idea behind Helix BioPharma Corp and Theratechnologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.