Correlation Between SAB Biotherapeutics and GH Research
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and GH Research 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 GH Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and GH Research PLC, you can compare the effects of market volatilities on SAB Biotherapeutics and GH Research 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 GH Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and GH Research.
Diversification Opportunities for SAB Biotherapeutics and GH Research
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SAB and GHRS is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and GH Research PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GH Research PLC 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 GH Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GH Research PLC has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and GH Research go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and GH Research
Given the investment horizon of 90 days SAB Biotherapeutics is expected to under-perform the GH Research. But the stock apears to be less risky and, when comparing its historical volatility, SAB Biotherapeutics is 1.25 times less risky than GH Research. The stock trades about -0.26 of its potential returns per unit of risk. The GH Research PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 881.00 in GH Research PLC on November 27, 2024 and sell it today you would earn a total of 340.00 from holding GH Research PLC or generate 38.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. GH Research PLC
Performance |
| Timeline |
| SAB Biotherapeutics |
| GH Research PLC |
SAB Biotherapeutics and GH Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and GH Research
The main advantage of trading using opposite SAB Biotherapeutics and GH Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, GH Research 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 GH Research will offset losses from the drop in GH Research's long position.| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo Pharmaceuticals |
| GH Research vs. Molecular Partners AG | GH Research vs. MediciNova | GH Research vs. Anebulo Pharmaceuticals | GH Research vs. Champions Oncology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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