Correlation Between STERIS Plc and TC Traders

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

By analyzing existing cross correlation between STERIS plc and TC Traders Club, you can compare the effects of market volatilities on STERIS Plc and TC Traders 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 STERIS Plc with a short position of TC Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERIS Plc and TC Traders.

Diversification Opportunities for STERIS Plc and TC Traders

-0.35

Correlation Coefficient

STERIS Plc  TC Traders

Very good diversification

The 3 months correlation between STERIS and TRAD3 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding STERIS plc and TC Traders Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Traders Club and STERIS Plc 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 STERIS plc are associated (or correlated) with TC Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Traders Club has no effect on the direction of STERIS Plc i.e., STERIS Plc and TC Traders go up and down completely randomly.

Pair Corralation between STERIS Plc and TC Traders

Assuming the 90 days trading horizon STERIS Plc is expected to generate 47.9 times less return on investment than TC Traders. But when comparing it to its historical volatility, STERIS plc is 197.02 times less risky than TC Traders. It trades about 0.13 of its potential returns per unit of risk. TC Traders Club is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  651.00  in TC Traders Club on May 5, 2025 and sell it today you would earn a total of  17.00  from holding TC Traders Club or generate 2.61% return on investment over 90 days.

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

STERIS plc  vs.  TC Traders Club

STERIS plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in STERIS plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, STERIS Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TC Traders Club

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TC Traders Club are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, TC Traders may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with STERIS Plc and TC Traders

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

The idea behind STERIS plc and TC Traders Club 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.