Correlation Between SAB Biotherapeutics and Ikena Oncology
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Ikena Oncology 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 Ikena Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Ikena Oncology, you can compare the effects of market volatilities on SAB Biotherapeutics and Ikena Oncology 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 Ikena Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Ikena Oncology.
Diversification Opportunities for SAB Biotherapeutics and Ikena Oncology
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between SAB and Ikena is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Ikena Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ikena Oncology 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 Ikena Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ikena Oncology has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Ikena Oncology go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Ikena Oncology
Given the investment horizon of 90 days SAB Biotherapeutics is expected to under-perform the Ikena Oncology. In addition to that, SAB Biotherapeutics is 1.55 times more volatile than Ikena Oncology. It trades about -0.04 of its total potential returns per unit of risk. Ikena Oncology is currently generating about 0.04 per unit of volatility. If you would invest 144.00 in Ikena Oncology on August 24, 2024 and sell it today you would earn a total of 29.00 from holding Ikena Oncology or generate 20.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Ikena Oncology
Performance |
| Timeline |
| SAB Biotherapeutics |
| Ikena Oncology |
SAB Biotherapeutics and Ikena Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Ikena Oncology
The main advantage of trading using opposite SAB Biotherapeutics and Ikena Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Ikena Oncology 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 Ikena Oncology will offset losses from the drop in Ikena Oncology's long position.| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo Pharmaceuticals |
| Ikena Oncology vs. Lyra Therapeutics | Ikena Oncology vs. Hookipa Pharma | Ikena Oncology vs. Cingulate Warrants | Ikena Oncology vs. SAB Biotherapeutics |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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