Correlation Between First Wave and SAB Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both First Wave 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 First Wave and SAB Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Wave BioPharma and SAB Biotherapeutics, you can compare the effects of market volatilities on First Wave 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 First Wave with a short position of SAB Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Wave and SAB Biotherapeutics.
Diversification Opportunities for First Wave and SAB Biotherapeutics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and SAB is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding First Wave BioPharma and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and First Wave 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 First Wave BioPharma 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 First Wave i.e., First Wave and SAB Biotherapeutics go up and down completely randomly.
Pair Corralation between First Wave and SAB Biotherapeutics
If you would invest 269.00 in SAB Biotherapeutics on August 25, 2024 and sell it today you would earn a total of 44.00 from holding SAB Biotherapeutics or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
First Wave BioPharma vs. SAB Biotherapeutics
Performance |
| Timeline |
| First Wave BioPharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SAB Biotherapeutics |
First Wave and SAB Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Wave and SAB Biotherapeutics
The main advantage of trading using opposite First Wave and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Wave 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.| First Wave vs. Quoin Pharmaceuticals Ltd | First Wave vs. Revelation Biosciences | First Wave vs. Dermata Therapeutics | First Wave vs. LMF Acquisition Opportunities |
| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo 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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