Correlation Between Blueprint Medicines and Sana Biotechnology
Can any of the company-specific risk be diversified away by investing in both Blueprint Medicines 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 Blueprint Medicines and Sana Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blueprint Medicines Corp and Sana Biotechnology, you can compare the effects of market volatilities on Blueprint Medicines 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 Blueprint Medicines with a short position of Sana Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueprint Medicines and Sana Biotechnology.
Diversification Opportunities for Blueprint Medicines and Sana Biotechnology
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Blueprint and Sana is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Blueprint Medicines Corp and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology and Blueprint Medicines 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 Blueprint Medicines 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 Blueprint Medicines i.e., Blueprint Medicines and Sana Biotechnology go up and down completely randomly.
Pair Corralation between Blueprint Medicines and Sana Biotechnology
Given the investment horizon of 90 days Blueprint Medicines is expected to generate 5.03 times less return on investment than Sana Biotechnology. But when comparing it to its historical volatility, Blueprint Medicines Corp is 7.92 times less risky than Sana Biotechnology. It trades about 0.32 of its potential returns per unit of risk. Sana Biotechnology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Sana Biotechnology on November 2, 2024 and sell it today you would earn a total of 184.00 from holding Sana Biotechnology or generate 111.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blueprint Medicines Corp vs. Sana Biotechnology
Performance |
| Timeline |
| Blueprint Medicines Corp |
| Sana Biotechnology |
Blueprint Medicines and Sana Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blueprint Medicines and Sana Biotechnology
The main advantage of trading using opposite Blueprint Medicines and Sana Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blueprint Medicines 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.| Blueprint Medicines vs. Terns Pharmaceuticals | Blueprint Medicines vs. Amylyx Pharmaceuticals | Blueprint Medicines vs. Acumen Pharmaceuticals | Blueprint Medicines vs. Inozyme Pharma |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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