Correlation Between Sugentech and Access Bio
Can any of the company-specific risk be diversified away by investing in both Sugentech and Access 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 Sugentech and Access Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sugentech and Access Bio, you can compare the effects of market volatilities on Sugentech and Access 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 Sugentech with a short position of Access Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sugentech and Access Bio.
Diversification Opportunities for Sugentech and Access Bio
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sugentech and Access is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sugentech and Access Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Bio and Sugentech 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 Sugentech are associated (or correlated) with Access Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Bio has no effect on the direction of Sugentech i.e., Sugentech and Access Bio go up and down completely randomly.
Pair Corralation between Sugentech and Access Bio
Assuming the 90 days trading horizon Sugentech is expected to under-perform the Access Bio. But the stock apears to be less risky and, when comparing its historical volatility, Sugentech is 1.07 times less risky than Access Bio. The stock trades about -0.21 of its potential returns per unit of risk. The Access Bio is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 608,000 in Access Bio on September 1, 2024 and sell it today you would lose (54,000) from holding Access Bio or give up 8.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sugentech vs. Access Bio
Performance |
| Timeline |
| Sugentech |
| Access Bio |
Sugentech and Access Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sugentech and Access Bio
The main advantage of trading using opposite Sugentech and Access Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sugentech position performs unexpectedly, Access 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 Access Bio will offset losses from the drop in Access Bio's long position.The idea behind Sugentech and Access 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.| Access Bio vs. Iljin Display | Access Bio vs. Display Tech Co | Access Bio vs. Polaris Office Corp | Access Bio vs. Kaonmedia Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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