Correlation Between Axcella Health and SAB Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Axcella Health and SAB Biotherapeutics 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 Axcella Health and SAB Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axcella Health and SAB Biotherapeutics, you can compare the effects of market volatilities on Axcella Health and SAB Biotherapeutics 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 Axcella Health with a short position of SAB Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axcella Health and SAB Biotherapeutics.
Diversification Opportunities for Axcella Health and SAB Biotherapeutics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axcella and SAB is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Axcella Health and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and Axcella Health 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 Axcella Health are associated (or correlated) with SAB Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Biotherapeutics has no effect on the direction of Axcella Health i.e., Axcella Health and SAB Biotherapeutics go up and down completely randomly.
Pair Corralation between Axcella Health and SAB Biotherapeutics
If you would invest 292.00 in SAB Biotherapeutics on August 28, 2024 and sell it today you would earn a total of 5.00 from holding SAB Biotherapeutics or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Axcella Health vs. SAB Biotherapeutics
Performance |
| Timeline |
| Axcella Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SAB Biotherapeutics |
Axcella Health and SAB Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axcella Health and SAB Biotherapeutics
The main advantage of trading using opposite Axcella Health and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axcella Health position performs unexpectedly, SAB Biotherapeutics 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 SAB Biotherapeutics will offset losses from the drop in SAB Biotherapeutics' long position.| Axcella Health vs. Cyclerion Therapeutics | Axcella Health vs. Kezar Life Sciences | Axcella Health vs. CytomX Therapeutics | Axcella Health vs. Assembly Biosciences |
| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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