Correlation Between Texas Instruments and ProMIS Neurosciences

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

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

Diversification Opportunities for Texas Instruments and ProMIS Neurosciences

-0.26

Correlation Coefficient

Texas Instruments  ProMIS Neurosciences

Very good diversification

The 3 months correlation between Texas and ProMIS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Texas Instruments Incorporated and ProMIS Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProMIS Neurosciences and Texas Instruments 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 Texas Instruments Incorporated are associated (or correlated) with ProMIS Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProMIS Neurosciences has no effect on the direction of Texas Instruments i.e., Texas Instruments and ProMIS Neurosciences go up and down completely randomly.

Pair Corralation between Texas Instruments and ProMIS Neurosciences

Considering the 90-day investment horizon Texas Instruments is expected to generate 7.11 times less return on investment than ProMIS Neurosciences. But when comparing it to its historical volatility, Texas Instruments Incorporated is 8.32 times less risky than ProMIS Neurosciences. It trades about 0.1 of its potential returns per unit of risk. ProMIS Neurosciences is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  57.00  in ProMIS Neurosciences on May 6, 2025 and sell it today you would earn a total of  20.00  from holding ProMIS Neurosciences or generate 35.09% return on investment over 90 days.

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

Texas Instruments Incorporated  vs.  ProMIS Neurosciences

Texas Instruments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Texas Instruments Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Texas Instruments displayed solid returns over the last few months and may actually be approaching a breakup point.

ProMIS Neurosciences

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ProMIS Neurosciences are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, ProMIS Neurosciences displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Texas Instruments and ProMIS Neurosciences

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

The idea behind Texas Instruments Incorporated and ProMIS Neurosciences 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.