Correlation Between SAB Biotherapeutics and Axim Biotechnologies
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Axim Biotechnologies 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 Axim Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Axim Biotechnologies, you can compare the effects of market volatilities on SAB Biotherapeutics and Axim Biotechnologies 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 Axim Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Axim Biotechnologies.
Diversification Opportunities for SAB Biotherapeutics and Axim Biotechnologies
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAB and Axim is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Axim Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axim Biotechnologies 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 Axim Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axim Biotechnologies has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Axim Biotechnologies go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Axim Biotechnologies
Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 8.66 times less return on investment than Axim Biotechnologies. But when comparing it to its historical volatility, SAB Biotherapeutics is 1.67 times less risky than Axim Biotechnologies. It trades about 0.01 of its potential returns per unit of risk. Axim Biotechnologies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Axim Biotechnologies on November 27, 2024 and sell it today you would lose (1.68) from holding Axim Biotechnologies or give up 84.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Axim Biotechnologies
Performance |
| Timeline |
| SAB Biotherapeutics |
| Axim Biotechnologies |
SAB Biotherapeutics and Axim Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Axim Biotechnologies
The main advantage of trading using opposite SAB Biotherapeutics and Axim Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Axim Biotechnologies 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 Axim Biotechnologies will offset losses from the drop in Axim Biotechnologies' long position.| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo Pharmaceuticals |
| Axim Biotechnologies vs. Cellectis SA | Axim Biotechnologies vs. Biotron Limited | Axim Biotechnologies vs. Regenicin | Axim Biotechnologies vs. biOasis Technologies |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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