Correlation Between SAB Biotherapeutics and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Lixte Biotechnology 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 Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on SAB Biotherapeutics and Lixte Biotechnology 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 Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Lixte Biotechnology.
Diversification Opportunities for SAB Biotherapeutics and Lixte Biotechnology
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAB and Lixte is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology 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 Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Lixte Biotechnology
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 3.36 times more return on investment than Lixte Biotechnology. However, SAB Biotherapeutics is 3.36 times more volatile than Lixte Biotechnology Holdings. It trades about 0.15 of its potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about 0.04 per unit of risk. If you would invest 5.26 in SAB Biotherapeutics on August 31, 2024 and sell it today you would earn a total of 1.57 from holding SAB Biotherapeutics or generate 29.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Lixte Biotechnology Holdings
Performance |
| Timeline |
| SAB Biotherapeutics |
| Lixte Biotechnology |
SAB Biotherapeutics and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Lixte Biotechnology
The main advantage of trading using opposite SAB Biotherapeutics and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Lixte Biotechnology 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 Lixte Biotechnology will offset losses from the drop in Lixte Biotechnology's long position.| SAB Biotherapeutics vs. SAB Biotherapeutics | SAB Biotherapeutics vs. Jasper Therapeutics | SAB Biotherapeutics vs. NRx Pharmaceuticals |
| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Neurobo Pharmaceuticals | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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