Correlation Between SAB Biotherapeutics and Kronos Bio
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Kronos Bio 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 Kronos Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Kronos Bio, you can compare the effects of market volatilities on SAB Biotherapeutics and Kronos Bio 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 Kronos Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Kronos Bio.
Diversification Opportunities for SAB Biotherapeutics and Kronos Bio
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAB and Kronos is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Kronos Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Bio 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 Kronos Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Bio has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Kronos Bio go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Kronos Bio
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 20.07 times more return on investment than Kronos Bio. However, SAB Biotherapeutics is 20.07 times more volatile than Kronos Bio. It trades about 0.11 of its potential returns per unit of risk. Kronos Bio is currently generating about 0.0 per unit of risk. If you would invest 5.00 in SAB Biotherapeutics on September 4, 2024 and sell it today you would earn a total of 0.17 from holding SAB Biotherapeutics or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.15% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Kronos Bio
Performance |
| Timeline |
| SAB Biotherapeutics |
| Kronos Bio |
SAB Biotherapeutics and Kronos Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Kronos Bio
The main advantage of trading using opposite SAB Biotherapeutics and Kronos Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Kronos Bio 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 Kronos Bio will offset losses from the drop in Kronos Bio's long position.| SAB Biotherapeutics vs. SAB Biotherapeutics | SAB Biotherapeutics vs. Jasper Therapeutics | SAB Biotherapeutics vs. NRx Pharmaceuticals | SAB Biotherapeutics vs. Surrozen Warrant |
| Kronos Bio vs. Candel Therapeutics | Kronos Bio vs. Cingulate Warrants | Kronos Bio vs. Unicycive Therapeutics | Kronos Bio vs. Quoin Pharmaceuticals Ltd |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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