Correlation Between Bellicum Pharmaceuticals and SAB Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Bellicum Pharmaceuticals 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 Bellicum Pharmaceuticals and SAB Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bellicum Pharmaceuticals and SAB Biotherapeutics, you can compare the effects of market volatilities on Bellicum Pharmaceuticals 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 Bellicum Pharmaceuticals with a short position of SAB Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellicum Pharmaceuticals and SAB Biotherapeutics.
Diversification Opportunities for Bellicum Pharmaceuticals and SAB Biotherapeutics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bellicum and SAB is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bellicum Pharmaceuticals and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and Bellicum Pharmaceuticals 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 Bellicum Pharmaceuticals 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 Bellicum Pharmaceuticals i.e., Bellicum Pharmaceuticals and SAB Biotherapeutics go up and down completely randomly.
Pair Corralation between Bellicum Pharmaceuticals and SAB Biotherapeutics
Given the investment horizon of 90 days Bellicum Pharmaceuticals is expected to generate 18.46 times less return on investment than SAB Biotherapeutics. But when comparing it to its historical volatility, Bellicum Pharmaceuticals is 5.42 times less risky than SAB Biotherapeutics. It trades about 0.03 of its potential returns per unit of risk. SAB Biotherapeutics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4.04 in SAB Biotherapeutics on August 27, 2024 and sell it today you would earn a total of 3.26 from holding SAB Biotherapeutics or generate 80.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 34.49% |
| Values | Daily Returns |
Bellicum Pharmaceuticals vs. SAB Biotherapeutics
Performance |
| Timeline |
| Bellicum Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SAB Biotherapeutics |
Bellicum Pharmaceuticals and SAB Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellicum Pharmaceuticals and SAB Biotherapeutics
The main advantage of trading using opposite Bellicum Pharmaceuticals and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellicum Pharmaceuticals 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.| Bellicum Pharmaceuticals vs. Cellectis SA | Bellicum Pharmaceuticals vs. Adaptimmune Therapeutics Plc | Bellicum Pharmaceuticals vs. Atara Biotherapeutics | Bellicum Pharmaceuticals vs. Affimed NV |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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