Correlation Between Nuvation Bio and SAB Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Nuvation Bio 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 Nuvation Bio and SAB Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuvation Bio and SAB Biotherapeutics, you can compare the effects of market volatilities on Nuvation Bio 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 Nuvation Bio with a short position of SAB Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvation Bio and SAB Biotherapeutics.
Diversification Opportunities for Nuvation Bio and SAB Biotherapeutics
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nuvation and SAB is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nuvation Bio and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and Nuvation Bio 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 Nuvation Bio 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 Nuvation Bio i.e., Nuvation Bio and SAB Biotherapeutics go up and down completely randomly.
Pair Corralation between Nuvation Bio and SAB Biotherapeutics
Given the investment horizon of 90 days Nuvation Bio is expected to generate 0.92 times more return on investment than SAB Biotherapeutics. However, Nuvation Bio is 1.09 times less risky than SAB Biotherapeutics. It trades about 0.09 of its potential returns per unit of risk. SAB Biotherapeutics is currently generating about -0.05 per unit of risk. If you would invest 129.00 in Nuvation Bio on September 2, 2024 and sell it today you would earn a total of 161.00 from holding Nuvation Bio or generate 124.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuvation Bio vs. SAB Biotherapeutics
Performance |
| Timeline |
| Nuvation Bio |
| SAB Biotherapeutics |
Nuvation Bio and SAB Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuvation Bio and SAB Biotherapeutics
The main advantage of trading using opposite Nuvation Bio and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvation Bio 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.| Nuvation Bio vs. Assembly Biosciences | Nuvation Bio vs. Instil Bio | Nuvation Bio vs. Achilles Therapeutics PLC | Nuvation Bio vs. NextCure |
| SAB Biotherapeutics vs. Tff Pharmaceuticals | SAB Biotherapeutics vs. Eliem Therapeutics | SAB Biotherapeutics vs. Inhibrx | SAB Biotherapeutics vs. Enliven Therapeutics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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