Correlation Between SAB Biotherapeutics and Agilent Technologies
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Agilent Technologies 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 Agilent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Agilent Technologies, you can compare the effects of market volatilities on SAB Biotherapeutics and Agilent Technologies 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 Agilent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Agilent Technologies.
Diversification Opportunities for SAB Biotherapeutics and Agilent Technologies
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAB and Agilent is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies 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 Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Agilent Technologies go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Agilent Technologies
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 13.14 times more return on investment than Agilent Technologies. However, SAB Biotherapeutics is 13.14 times more volatile than Agilent Technologies. It trades about 0.15 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.08 per unit of risk. If you would invest 5.34 in SAB Biotherapeutics on August 23, 2024 and sell it today you would earn a total of 1.66 from holding SAB Biotherapeutics or generate 31.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Agilent Technologies
Performance |
| Timeline |
| SAB Biotherapeutics |
| Agilent Technologies |
SAB Biotherapeutics and Agilent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Agilent Technologies
The main advantage of trading using opposite SAB Biotherapeutics and Agilent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Agilent Technologies 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 Agilent Technologies will offset losses from the drop in Agilent Technologies' long position.| SAB Biotherapeutics vs. Kiora Pharmaceuticals | SAB Biotherapeutics vs. ZyVersa Therapeutics | SAB Biotherapeutics vs. Sonnet Biotherapeutics Holdings | SAB Biotherapeutics vs. Zura Bio Limited |
| Agilent Technologies vs. Danaher | Agilent Technologies vs. Illumina | Agilent Technologies vs. IDEXX Laboratories | Agilent Technologies vs. Waters |
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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