Correlation Between SAB Biotherapeutics and Mereo BioPharma
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Mereo BioPharma 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 Mereo BioPharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Mereo BioPharma Group, you can compare the effects of market volatilities on SAB Biotherapeutics and Mereo BioPharma 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 Mereo BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Mereo BioPharma.
Diversification Opportunities for SAB Biotherapeutics and Mereo BioPharma
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAB and Mereo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Mereo BioPharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mereo BioPharma Group 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 Mereo BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mereo BioPharma Group has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Mereo BioPharma go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Mereo BioPharma
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 29.39 times more return on investment than Mereo BioPharma. However, SAB Biotherapeutics is 29.39 times more volatile than Mereo BioPharma Group. It trades about 0.13 of its potential returns per unit of risk. Mereo BioPharma Group is currently generating about 0.1 per unit of risk. If you would invest 8.79 in SAB Biotherapeutics on September 12, 2024 and sell it today you would lose (1.79) from holding SAB Biotherapeutics or give up 20.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 72.73% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Mereo BioPharma Group
Performance |
| Timeline |
| SAB Biotherapeutics |
| Mereo BioPharma Group |
SAB Biotherapeutics and Mereo BioPharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Mereo BioPharma
The main advantage of trading using opposite SAB Biotherapeutics and Mereo BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Mereo BioPharma 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 Mereo BioPharma will offset losses from the drop in Mereo BioPharma's long position.| SAB Biotherapeutics vs. SAB Biotherapeutics | SAB Biotherapeutics vs. Jasper Therapeutics | SAB Biotherapeutics vs. NRx Pharmaceuticals | SAB Biotherapeutics vs. Surrozen Warrant |
| Mereo BioPharma vs. Terns Pharmaceuticals | Mereo BioPharma vs. PDS Biotechnology Corp | Mereo BioPharma vs. Inozyme Pharma | Mereo BioPharma vs. Hookipa Pharma |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |