Correlation Between Theratechnologies and Microbix Biosystems

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

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

Diversification Opportunities for Theratechnologies and Microbix Biosystems

-0.08

Correlation Coefficient

Theratechnologies  Microbix Biosystems

Good diversification

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

Pair Corralation between Theratechnologies and Microbix Biosystems

Assuming the 90 days horizon Theratechnologies is expected to generate 1.69 times more return on investment than Microbix Biosystems. However, Theratechnologies is 1.69 times more volatile than Microbix Biosystems. It trades about 0.05 of its potential returns per unit of risk. Microbix Biosystems is currently generating about -0.08 per unit of risk. If you would invest  391.00  in Theratechnologies on April 24, 2025 and sell it today you would earn a total of  38.00  from holding Theratechnologies or generate 9.72% return on investment over 90 days.

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

Theratechnologies  vs.  Microbix Biosystems

Theratechnologies

Risk-Adjusted Performance

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.

Microbix Biosystems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microbix Biosystems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Theratechnologies and Microbix Biosystems

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

The idea behind Theratechnologies and Microbix Biosystems 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.