Correlation Between Theriva Biologics and Tourmaline Bio

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

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

Diversification Opportunities for Theriva Biologics and Tourmaline Bio

-0.71

Correlation Coefficient

Theriva Biologics  Tourmaline Bio

Pay attention - limited upside

The 3 months correlation between Theriva and Tourmaline is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Theriva Biologics and Tourmaline Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Bio and Theriva Biologics 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 Theriva Biologics are associated (or correlated) with Tourmaline Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Bio has no effect on the direction of Theriva Biologics i.e., Theriva Biologics and Tourmaline Bio go up and down completely randomly.

Pair Corralation between Theriva Biologics and Tourmaline Bio

Given the investment horizon of 90 days Theriva Biologics is expected to under-perform the Tourmaline Bio. In addition to that, Theriva Biologics is 2.64 times more volatile than Tourmaline Bio. It trades about -0.13 of its total potential returns per unit of risk. Tourmaline Bio is currently generating about 0.12 per unit of volatility. If you would invest  1,927  in Tourmaline Bio on September 13, 2024 and sell it today you would earn a total of  511.00  from holding Tourmaline Bio or generate 26.52% return on investment over 90 days.

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

Theriva Biologics  vs.  Tourmaline Bio

Theriva Biologics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Theriva Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Tourmaline Bio

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tourmaline Bio are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Tourmaline Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Theriva Biologics and Tourmaline Bio

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

The idea behind Theriva Biologics and Tourmaline Bio 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.