Correlation Between SAB Biotherapeutics and Equillium
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Equillium 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 Equillium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Equillium, you can compare the effects of market volatilities on SAB Biotherapeutics and Equillium 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 Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Equillium.
Diversification Opportunities for SAB Biotherapeutics and Equillium
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAB and Equillium is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium 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 Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Equillium go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Equillium
Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 2.57 times more return on investment than Equillium. However, SAB Biotherapeutics is 2.57 times more volatile than Equillium. It trades about 0.09 of its potential returns per unit of risk. Equillium is currently generating about -0.16 per unit of risk. If you would invest 342.00 in SAB Biotherapeutics on September 13, 2024 and sell it today you would earn a total of 45.00 from holding SAB Biotherapeutics or generate 13.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Equillium
Performance |
| Timeline |
| SAB Biotherapeutics |
| Equillium |
SAB Biotherapeutics and Equillium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Equillium
The main advantage of trading using opposite SAB Biotherapeutics and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.| SAB Biotherapeutics vs. Puma Biotechnology | SAB Biotherapeutics vs. Iovance Biotherapeutics | SAB Biotherapeutics vs. Sarepta Therapeutics | SAB Biotherapeutics vs. Day One Biopharmaceuticals |
| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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