Correlation Between GH Research and SAB Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both GH Research 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 GH Research and SAB Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GH Research PLC and SAB Biotherapeutics, you can compare the effects of market volatilities on GH Research 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 GH Research with a short position of SAB Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GH Research and SAB Biotherapeutics.
Diversification Opportunities for GH Research and SAB Biotherapeutics
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GHRS and SAB is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding GH Research PLC and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and GH Research 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 GH Research PLC 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 GH Research i.e., GH Research and SAB Biotherapeutics go up and down completely randomly.
Pair Corralation between GH Research and SAB Biotherapeutics
Given the investment horizon of 90 days GH Research PLC is expected to generate 0.65 times more return on investment than SAB Biotherapeutics. However, GH Research PLC is 1.55 times less risky than SAB Biotherapeutics. It trades about 0.04 of its potential returns per unit of risk. SAB Biotherapeutics is currently generating about 0.02 per unit of risk. If you would invest 838.00 in GH Research PLC on November 27, 2024 and sell it today you would earn a total of 383.00 from holding GH Research PLC or generate 45.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GH Research PLC vs. SAB Biotherapeutics
Performance |
| Timeline |
| GH Research PLC |
| SAB Biotherapeutics |
GH Research and SAB Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GH Research and SAB Biotherapeutics
The main advantage of trading using opposite GH Research and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GH Research 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.| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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