Correlation Between Sana Biotechnology and LMF Acquisition
Can any of the company-specific risk be diversified away by investing in both Sana Biotechnology and LMF Acquisition 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 LMF Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sana Biotechnology and LMF Acquisition Opportunities, you can compare the effects of market volatilities on Sana Biotechnology and LMF Acquisition 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 LMF Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and LMF Acquisition.
Diversification Opportunities for Sana Biotechnology and LMF Acquisition
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sana and LMF is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and LMF Acquisition Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LMF Acquisition Oppo 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 LMF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LMF Acquisition Oppo has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and LMF Acquisition go up and down completely randomly.
Pair Corralation between Sana Biotechnology and LMF Acquisition
Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the LMF Acquisition. But the stock apears to be less risky and, when comparing its historical volatility, Sana Biotechnology is 2.02 times less risky than LMF Acquisition. The stock trades about -0.28 of its potential returns per unit of risk. The LMF Acquisition Opportunities is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3.79 in LMF Acquisition Opportunities on September 23, 2024 and sell it today you would lose (1.14) from holding LMF Acquisition Opportunities or give up 30.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sana Biotechnology vs. LMF Acquisition Opportunities
Performance |
| Timeline |
| Sana Biotechnology |
| LMF Acquisition Oppo |
Sana Biotechnology and LMF Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sana Biotechnology and LMF Acquisition
The main advantage of trading using opposite Sana Biotechnology and LMF Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana Biotechnology position performs unexpectedly, LMF Acquisition 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 LMF Acquisition will offset losses from the drop in LMF Acquisition's long position.| Sana Biotechnology vs. Olema Pharmaceuticals | Sana Biotechnology vs. Cullinan Oncology LLC | Sana Biotechnology vs. Zentalis Pharmaceuticals Llc | Sana Biotechnology vs. X4 Pharmaceuticals |
| LMF Acquisition vs. Fate Therapeutics | LMF Acquisition vs. Sana Biotechnology | LMF Acquisition vs. Caribou Biosciences | LMF Acquisition 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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