Correlation Between SAB Biotherapeutics and AnaptysBio
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and AnaptysBio 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 AnaptysBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and AnaptysBio, you can compare the effects of market volatilities on SAB Biotherapeutics and AnaptysBio 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 AnaptysBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and AnaptysBio.
Diversification Opportunities for SAB Biotherapeutics and AnaptysBio
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAB and AnaptysBio is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and AnaptysBio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AnaptysBio 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 AnaptysBio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AnaptysBio has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and AnaptysBio go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and AnaptysBio
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 9.37 times more return on investment than AnaptysBio. However, SAB Biotherapeutics is 9.37 times more volatile than AnaptysBio. It trades about 0.16 of its potential returns per unit of risk. AnaptysBio is currently generating about 0.14 per unit of risk. If you would invest 9.00 in SAB Biotherapeutics on October 21, 2024 and sell it today you would earn a total of 2.00 from holding SAB Biotherapeutics or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAB Biotherapeutics vs. AnaptysBio
Performance |
| Timeline |
| SAB Biotherapeutics |
| AnaptysBio |
SAB Biotherapeutics and AnaptysBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and AnaptysBio
The main advantage of trading using opposite SAB Biotherapeutics and AnaptysBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, AnaptysBio 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 AnaptysBio will offset losses from the drop in AnaptysBio's long position.| SAB Biotherapeutics vs. SAB Biotherapeutics | SAB Biotherapeutics vs. Jasper Therapeutics | SAB Biotherapeutics vs. NRx Pharmaceuticals | SAB Biotherapeutics vs. Surrozen Warrant |
| AnaptysBio vs. Crinetics Pharmaceuticals | AnaptysBio vs. Rhythm Pharmaceuticals | AnaptysBio vs. Kura Oncology | AnaptysBio vs. CytomX 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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