Correlation Between SAB Biotherapeutics and NextCure
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and NextCure 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 NextCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and NextCure, you can compare the effects of market volatilities on SAB Biotherapeutics and NextCure 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 NextCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and NextCure.
Diversification Opportunities for SAB Biotherapeutics and NextCure
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SAB and NextCure is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and NextCure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextCure 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 NextCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextCure has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and NextCure go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and NextCure
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 25.19 times more return on investment than NextCure. However, SAB Biotherapeutics is 25.19 times more volatile than NextCure. It trades about 0.12 of its potential returns per unit of risk. NextCure is currently generating about -0.01 per unit of risk. If you would invest 4.68 in SAB Biotherapeutics on November 1, 2024 and sell it today you would lose (1.53) from holding SAB Biotherapeutics or give up 32.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.43% |
| Values | Daily Returns |
SAB Biotherapeutics vs. NextCure
Performance |
| Timeline |
| SAB Biotherapeutics |
| NextCure |
SAB Biotherapeutics and NextCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and NextCure
The main advantage of trading using opposite SAB Biotherapeutics and NextCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, NextCure 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 NextCure will offset losses from the drop in NextCure's long position.| SAB Biotherapeutics vs. SAB Biotherapeutics | SAB Biotherapeutics vs. Jasper Therapeutics | SAB Biotherapeutics vs. NRx Pharmaceuticals | SAB Biotherapeutics vs. Surrozen Warrant |
| NextCure vs. CytomX Therapeutics | NextCure vs. Spero Therapeutics | NextCure vs. Instil Bio | NextCure vs. Assembly Biosciences |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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