Correlation Between Absci Corp and Sana Biotechnology
Can any of the company-specific risk be diversified away by investing in both Absci Corp and Sana Biotechnology 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 Absci Corp and Sana Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absci Corp and Sana Biotechnology, you can compare the effects of market volatilities on Absci Corp and Sana Biotechnology 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 Absci Corp with a short position of Sana Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absci Corp and Sana Biotechnology.
Diversification Opportunities for Absci Corp and Sana Biotechnology
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absci and Sana is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Absci Corp and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology and Absci Corp 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 Absci Corp are associated (or correlated) with Sana Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sana Biotechnology has no effect on the direction of Absci Corp i.e., Absci Corp and Sana Biotechnology go up and down completely randomly.
Pair Corralation between Absci Corp and Sana Biotechnology
Given the investment horizon of 90 days Absci Corp is expected to under-perform the Sana Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Absci Corp is 1.02 times less risky than Sana Biotechnology. The stock trades about -0.38 of its potential returns per unit of risk. The Sana Biotechnology is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest 381.00 in Sana Biotechnology on August 25, 2024 and sell it today you would lose (120.00) from holding Sana Biotechnology or give up 31.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absci Corp vs. Sana Biotechnology
Performance |
| Timeline |
| Absci Corp |
| Sana Biotechnology |
Absci Corp and Sana Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absci Corp and Sana Biotechnology
The main advantage of trading using opposite Absci Corp and Sana Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absci Corp position performs unexpectedly, Sana Biotechnology 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 Sana Biotechnology will offset losses from the drop in Sana Biotechnology's long position.| Absci Corp vs. Eliem Therapeutics | Absci Corp vs. HCW Biologics | Absci Corp vs. Scpharmaceuticals | Absci Corp vs. Milestone Pharmaceuticals |
| Sana Biotechnology vs. Olema Pharmaceuticals | Sana Biotechnology vs. Cullinan Oncology LLC | Sana Biotechnology vs. Zentalis Pharmaceuticals Llc | Sana Biotechnology vs. X4 Pharmaceuticals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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