Correlation Between Sana Biotechnology and Equillium
Can any of the company-specific risk be diversified away by investing in both Sana Biotechnology and Equillium 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 Sana Biotechnology and Equillium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sana Biotechnology and Equillium, you can compare the effects of market volatilities on Sana Biotechnology and Equillium 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 Sana Biotechnology with a short position of Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and Equillium.
Diversification Opportunities for Sana Biotechnology and Equillium
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sana and Equillium is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and Sana Biotechnology 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 Sana Biotechnology are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Equillium go up and down completely randomly.
Pair Corralation between Sana Biotechnology and Equillium
Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the Equillium. In addition to that, Sana Biotechnology is 1.56 times more volatile than Equillium. It trades about -0.17 of its total potential returns per unit of risk. Equillium is currently generating about -0.16 per unit of volatility. If you would invest 85.00 in Equillium on September 13, 2024 and sell it today you would lose (15.00) from holding Equillium or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sana Biotechnology vs. Equillium
Performance |
| Timeline |
| Sana Biotechnology |
| Equillium |
Sana Biotechnology and Equillium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sana Biotechnology and Equillium
The main advantage of trading using opposite Sana Biotechnology and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana Biotechnology position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.| Sana Biotechnology vs. Puma Biotechnology | Sana Biotechnology vs. Iovance Biotherapeutics | Sana Biotechnology vs. Sarepta Therapeutics | Sana Biotechnology vs. Day One Biopharmaceuticals |
| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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