Correlation Between Dynavax Technologies and Sage Therapeutic
Can any of the company-specific risk be diversified away by investing in both Dynavax Technologies and Sage Therapeutic 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 Dynavax Technologies and Sage Therapeutic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynavax Technologies and Sage Therapeutic, you can compare the effects of market volatilities on Dynavax Technologies and Sage Therapeutic 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 Dynavax Technologies with a short position of Sage Therapeutic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynavax Technologies and Sage Therapeutic.
Diversification Opportunities for Dynavax Technologies and Sage Therapeutic
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dynavax and Sage is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dynavax Technologies and Sage Therapeutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Therapeutic and Dynavax Technologies 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 Dynavax Technologies are associated (or correlated) with Sage Therapeutic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Therapeutic has no effect on the direction of Dynavax Technologies i.e., Dynavax Technologies and Sage Therapeutic go up and down completely randomly.
Pair Corralation between Dynavax Technologies and Sage Therapeutic
Given the investment horizon of 90 days Dynavax Technologies is expected to generate 0.45 times more return on investment than Sage Therapeutic. However, Dynavax Technologies is 2.21 times less risky than Sage Therapeutic. It trades about 0.02 of its potential returns per unit of risk. Sage Therapeutic is currently generating about -0.06 per unit of risk. If you would invest 1,155 in Dynavax Technologies on September 4, 2024 and sell it today you would earn a total of 149.00 from holding Dynavax Technologies or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynavax Technologies vs. Sage Therapeutic
Performance |
| Timeline |
| Dynavax Technologies |
| Sage Therapeutic |
Dynavax Technologies and Sage Therapeutic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynavax Technologies and Sage Therapeutic
The main advantage of trading using opposite Dynavax Technologies and Sage Therapeutic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynavax Technologies position performs unexpectedly, Sage Therapeutic 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 Sage Therapeutic will offset losses from the drop in Sage Therapeutic's long position.| Dynavax Technologies vs. Candel Therapeutics | Dynavax Technologies vs. Cingulate Warrants | Dynavax Technologies vs. Unicycive Therapeutics | Dynavax Technologies vs. Cardio Diagnostics Holdings |
| Sage Therapeutic vs. Apellis Pharmaceuticals | Sage Therapeutic vs. Terns Pharmaceuticals | Sage Therapeutic vs. Day One Biopharmaceuticals | Sage Therapeutic vs. Blueprint Medicines Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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