Correlation Between SAB Biotherapeutics and BridgeBio Pharma
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and BridgeBio Pharma 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 BridgeBio Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and BridgeBio Pharma, you can compare the effects of market volatilities on SAB Biotherapeutics and BridgeBio Pharma 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 BridgeBio Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and BridgeBio Pharma.
Diversification Opportunities for SAB Biotherapeutics and BridgeBio Pharma
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAB and BridgeBio is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and BridgeBio Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BridgeBio Pharma 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 BridgeBio Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BridgeBio Pharma has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and BridgeBio Pharma go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and BridgeBio Pharma
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 1.77 times less return on investment than BridgeBio Pharma. In addition to that, SAB Biotherapeutics is 4.81 times more volatile than BridgeBio Pharma. It trades about 0.01 of its total potential returns per unit of risk. BridgeBio Pharma is currently generating about 0.08 per unit of volatility. If you would invest 2,520 in BridgeBio Pharma on September 4, 2024 and sell it today you would earn a total of 140.00 from holding BridgeBio Pharma or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
SAB Biotherapeutics vs. BridgeBio Pharma
Performance |
| Timeline |
| SAB Biotherapeutics |
| BridgeBio Pharma |
SAB Biotherapeutics and BridgeBio Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and BridgeBio Pharma
The main advantage of trading using opposite SAB Biotherapeutics and BridgeBio Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, BridgeBio Pharma 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 BridgeBio Pharma will offset losses from the drop in BridgeBio Pharma's long position.| SAB Biotherapeutics vs. SAB Biotherapeutics | SAB Biotherapeutics vs. Jasper Therapeutics | SAB Biotherapeutics vs. NRx Pharmaceuticals | SAB Biotherapeutics vs. Surrozen Warrant |
| BridgeBio Pharma vs. Blueprint Medicines Corp | BridgeBio Pharma vs. Amylyx Pharmaceuticals | BridgeBio Pharma vs. Day One Biopharmaceuticals | BridgeBio Pharma vs. Terns Pharmaceuticals |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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