Correlation Between SAB Biotherapeutics and Compass Therapeutics
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Compass Therapeutics 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 Compass Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Compass Therapeutics, you can compare the effects of market volatilities on SAB Biotherapeutics and Compass Therapeutics 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 Compass Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Compass Therapeutics.
Diversification Opportunities for SAB Biotherapeutics and Compass Therapeutics
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAB and Compass is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Compass Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Therapeutics 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 Compass Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Therapeutics has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Compass Therapeutics go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Compass Therapeutics
Given the investment horizon of 90 days SAB Biotherapeutics is expected to under-perform the Compass Therapeutics. In addition to that, SAB Biotherapeutics is 1.22 times more volatile than Compass Therapeutics. It trades about -0.02 of its total potential returns per unit of risk. Compass Therapeutics is currently generating about -0.02 per unit of volatility. If you would invest 325.00 in Compass Therapeutics on August 28, 2024 and sell it today you would lose (175.00) from holding Compass Therapeutics or give up 53.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Compass Therapeutics
Performance |
| Timeline |
| SAB Biotherapeutics |
| Compass Therapeutics |
SAB Biotherapeutics and Compass Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Compass Therapeutics
The main advantage of trading using opposite SAB Biotherapeutics and Compass Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Compass Therapeutics 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 Compass Therapeutics will offset losses from the drop in Compass Therapeutics' long position.| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo Pharmaceuticals |
| Compass Therapeutics vs. Ideaya Biosciences | Compass Therapeutics vs. AnaptysBio | Compass Therapeutics vs. MeiraGTx Holdings PLC | Compass Therapeutics vs. Keros 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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