Correlation Between Connect Biopharma and SIGA Technologies
Can any of the company-specific risk be diversified away by investing in both Connect Biopharma and SIGA Technologies 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 Connect Biopharma and SIGA Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Connect Biopharma Holdings and SIGA Technologies, you can compare the effects of market volatilities on Connect Biopharma and SIGA Technologies 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 Connect Biopharma with a short position of SIGA Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connect Biopharma and SIGA Technologies.
Diversification Opportunities for Connect Biopharma and SIGA Technologies
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Connect and SIGA is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Connect Biopharma Holdings and SIGA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIGA Technologies and Connect Biopharma 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 Connect Biopharma Holdings are associated (or correlated) with SIGA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIGA Technologies has no effect on the direction of Connect Biopharma i.e., Connect Biopharma and SIGA Technologies go up and down completely randomly.
Pair Corralation between Connect Biopharma and SIGA Technologies
Given the investment horizon of 90 days Connect Biopharma Holdings is expected to under-perform the SIGA Technologies. In addition to that, Connect Biopharma is 1.26 times more volatile than SIGA Technologies. It trades about -0.04 of its total potential returns per unit of risk. SIGA Technologies is currently generating about 0.0 per unit of volatility. If you would invest 772.00 in SIGA Technologies on September 3, 2024 and sell it today you would lose (44.00) from holding SIGA Technologies or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connect Biopharma Holdings vs. SIGA Technologies
Performance |
| Timeline |
| Connect Biopharma |
| SIGA Technologies |
Connect Biopharma and SIGA Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connect Biopharma and SIGA Technologies
The main advantage of trading using opposite Connect Biopharma and SIGA Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connect Biopharma position performs unexpectedly, SIGA Technologies 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 SIGA Technologies will offset losses from the drop in SIGA Technologies' long position.| Connect Biopharma vs. DiaMedica Therapeutics | Connect Biopharma vs. Lyra Therapeutics | Connect Biopharma vs. Centessa Pharmaceuticals PLC |
| SIGA Technologies vs. Elanco Animal Health | SIGA Technologies vs. Esperion Therapeutics | SIGA Technologies vs. Catalent | SIGA Technologies vs. China Pharma Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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