Correlation Between SAB Biotherapeutics and Adagene
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Adagene 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 Adagene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Adagene, you can compare the effects of market volatilities on SAB Biotherapeutics and Adagene 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 Adagene. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Adagene.
Diversification Opportunities for SAB Biotherapeutics and Adagene
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAB and Adagene is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Adagene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adagene 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 Adagene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adagene has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Adagene go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Adagene
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 9.51 times more return on investment than Adagene. However, SAB Biotherapeutics is 9.51 times more volatile than Adagene. It trades about 0.14 of its potential returns per unit of risk. Adagene is currently generating about -0.11 per unit of risk. If you would invest 10.00 in SAB Biotherapeutics on October 20, 2024 and sell it today you would earn a total of 1.00 from holding SAB Biotherapeutics or generate 10.0% 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. Adagene
Performance |
| Timeline |
| SAB Biotherapeutics |
| Adagene |
SAB Biotherapeutics and Adagene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Adagene
The main advantage of trading using opposite SAB Biotherapeutics and Adagene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Adagene 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 Adagene will offset losses from the drop in Adagene's long position.| SAB Biotherapeutics vs. SAB Biotherapeutics | SAB Biotherapeutics vs. Jasper Therapeutics | SAB Biotherapeutics vs. NRx Pharmaceuticals | SAB Biotherapeutics vs. Surrozen Warrant |
| Adagene vs. Aerovate Therapeutics | Adagene vs. Acrivon Therapeutics, Common | Adagene vs. Rezolute | Adagene vs. AN2 Therapeutics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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