Correlation Between SAB Biotherapeutics and Kane Biotech
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Kane Biotech 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 Kane Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Kane Biotech, you can compare the effects of market volatilities on SAB Biotherapeutics and Kane Biotech 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 Kane Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Kane Biotech.
Diversification Opportunities for SAB Biotherapeutics and Kane Biotech
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAB and Kane is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Kane Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kane Biotech 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 Kane Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kane Biotech has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Kane Biotech go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Kane Biotech
Given the investment horizon of 90 days SAB Biotherapeutics is expected to under-perform the Kane Biotech. In addition to that, SAB Biotherapeutics is 1.09 times more volatile than Kane Biotech. It trades about -0.05 of its total potential returns per unit of risk. Kane Biotech is currently generating about 0.08 per unit of volatility. If you would invest 4.20 in Kane Biotech on September 1, 2024 and sell it today you would earn a total of 4.48 from holding Kane Biotech or generate 106.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Kane Biotech
Performance |
| Timeline |
| SAB Biotherapeutics |
| Kane Biotech |
SAB Biotherapeutics and Kane Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Kane Biotech
The main advantage of trading using opposite SAB Biotherapeutics and Kane Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Kane Biotech 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 Kane Biotech will offset losses from the drop in Kane Biotech's long position.| SAB Biotherapeutics vs. Processa Pharmaceuticals | SAB Biotherapeutics vs. Third Harmonic Bio | SAB Biotherapeutics vs. Cingulate Warrants | SAB Biotherapeutics vs. Anebulo Pharmaceuticals |
| Kane Biotech vs. Rigel Pharmaceuticals | Kane Biotech vs. Geron | Kane Biotech vs. Verastem | Kane Biotech vs. Immutep Ltd ADR |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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