Correlation Between Beam Therapeutics and Sana Biotechnology
Can any of the company-specific risk be diversified away by investing in both Beam Therapeutics 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 Beam Therapeutics and Sana Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beam Therapeutics and Sana Biotechnology, you can compare the effects of market volatilities on Beam Therapeutics 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 Beam Therapeutics with a short position of Sana Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beam Therapeutics and Sana Biotechnology.
Diversification Opportunities for Beam Therapeutics and Sana Biotechnology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beam and Sana is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Beam Therapeutics and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology and Beam Therapeutics 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 Beam Therapeutics 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 Beam Therapeutics i.e., Beam Therapeutics and Sana Biotechnology go up and down completely randomly.
Pair Corralation between Beam Therapeutics and Sana Biotechnology
Given the investment horizon of 90 days Beam Therapeutics is expected to generate 6.89 times less return on investment than Sana Biotechnology. But when comparing it to its historical volatility, Beam Therapeutics is 2.21 times less risky than Sana Biotechnology. It trades about 0.01 of its potential returns per unit of risk. Sana Biotechnology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 349.00 in Sana Biotechnology on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Sana Biotechnology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beam Therapeutics vs. Sana Biotechnology
Performance |
| Timeline |
| Beam Therapeutics |
| Sana Biotechnology |
Beam Therapeutics and Sana Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beam Therapeutics and Sana Biotechnology
The main advantage of trading using opposite Beam Therapeutics and Sana Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beam Therapeutics 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.| Beam Therapeutics vs. Editas Medicine | Beam Therapeutics vs. Crispr Therapeutics AG | Beam Therapeutics vs. Caribou Biosciences | Beam Therapeutics vs. Verve Therapeutics |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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