Correlation Between Sana Biotechnology and Fate Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sana Biotechnology and Fate Therapeutics 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 Fate Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sana Biotechnology and Fate Therapeutics, you can compare the effects of market volatilities on Sana Biotechnology and Fate Therapeutics 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 Fate Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and Fate Therapeutics.
Diversification Opportunities for Sana Biotechnology and Fate Therapeutics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sana and Fate is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Fate Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fate Therapeutics 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 Fate Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fate Therapeutics has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Fate Therapeutics go up and down completely randomly.
Pair Corralation between Sana Biotechnology and Fate Therapeutics
Given the investment horizon of 90 days Sana Biotechnology is expected to generate 7.21 times more return on investment than Fate Therapeutics. However, Sana Biotechnology is 7.21 times more volatile than Fate Therapeutics. It trades about 0.19 of its potential returns per unit of risk. Fate Therapeutics is currently generating about -0.25 per unit of risk. If you would invest 165.00 in Sana Biotechnology on October 21, 2024 and sell it today you would earn a total of 151.00 from holding Sana Biotechnology or generate 91.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sana Biotechnology vs. Fate Therapeutics
Performance |
| Timeline |
| Sana Biotechnology |
| Fate Therapeutics |
Sana Biotechnology and Fate Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sana Biotechnology and Fate Therapeutics
The main advantage of trading using opposite Sana Biotechnology and Fate Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana Biotechnology position performs unexpectedly, Fate Therapeutics 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 Fate Therapeutics will offset losses from the drop in Fate Therapeutics' long position.| Sana Biotechnology vs. Olema Pharmaceuticals | Sana Biotechnology vs. Cullinan Oncology LLC | Sana Biotechnology vs. Zentalis Pharmaceuticals Llc | Sana Biotechnology vs. X4 Pharmaceuticals |
| Fate Therapeutics vs. Atara Biotherapeutics | Fate Therapeutics vs. Sana Biotechnology | Fate Therapeutics vs. Caribou Biosciences | Fate Therapeutics vs. Arcus 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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