Correlation Between SAB Biotherapeutics and Atara Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Atara 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 SAB Biotherapeutics and Atara Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Atara Biotherapeutics, you can compare the effects of market volatilities on SAB Biotherapeutics and Atara 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 SAB Biotherapeutics with a short position of Atara Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Atara Biotherapeutics.
Diversification Opportunities for SAB Biotherapeutics and Atara Biotherapeutics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAB and Atara is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Atara Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atara Biotherapeutics and SAB Biotherapeutics 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 SAB Biotherapeutics are associated (or correlated) with Atara Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atara Biotherapeutics has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Atara Biotherapeutics go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Atara Biotherapeutics
Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 3.51 times less return on investment than Atara Biotherapeutics. But when comparing it to its historical volatility, SAB Biotherapeutics is 1.04 times less risky than Atara Biotherapeutics. It trades about 0.06 of its potential returns per unit of risk. Atara Biotherapeutics is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 883.00 in Atara Biotherapeutics on August 28, 2024 and sell it today you would earn a total of 329.00 from holding Atara Biotherapeutics or generate 37.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Atara Biotherapeutics
Performance |
| Timeline |
| SAB Biotherapeutics |
| Atara Biotherapeutics |
SAB Biotherapeutics and Atara Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Atara Biotherapeutics
The main advantage of trading using opposite SAB Biotherapeutics and Atara Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Atara 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 Atara Biotherapeutics will offset losses from the drop in Atara Biotherapeutics' long position.| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo Pharmaceuticals |
| Atara Biotherapeutics vs. Eliem Therapeutics | Atara Biotherapeutics vs. HCW Biologics | Atara Biotherapeutics vs. Scpharmaceuticals | Atara Biotherapeutics vs. Milestone 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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