Correlation Between Sana Biotechnology and Arcus Biosciences
Can any of the company-specific risk be diversified away by investing in both Sana Biotechnology and Arcus Biosciences 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 Arcus Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sana Biotechnology and Arcus Biosciences, you can compare the effects of market volatilities on Sana Biotechnology and Arcus Biosciences 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 Arcus Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and Arcus Biosciences.
Diversification Opportunities for Sana Biotechnology and Arcus Biosciences
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sana and Arcus is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Arcus Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcus Biosciences 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 Arcus Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcus Biosciences has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Arcus Biosciences go up and down completely randomly.
Pair Corralation between Sana Biotechnology and Arcus Biosciences
Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the Arcus Biosciences. In addition to that, Sana Biotechnology is 1.27 times more volatile than Arcus Biosciences. It trades about -0.39 of its total potential returns per unit of risk. Arcus Biosciences is currently generating about -0.04 per unit of volatility. If you would invest 1,666 in Arcus Biosciences on August 29, 2024 and sell it today you would lose (87.00) from holding Arcus Biosciences or give up 5.22% 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. Arcus Biosciences
Performance |
| Timeline |
| Sana Biotechnology |
| Arcus Biosciences |
Sana Biotechnology and Arcus Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sana Biotechnology and Arcus Biosciences
The main advantage of trading using opposite Sana Biotechnology and Arcus Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana Biotechnology position performs unexpectedly, Arcus Biosciences 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 Arcus Biosciences will offset losses from the drop in Arcus Biosciences' long position.| Sana Biotechnology vs. Olema Pharmaceuticals | Sana Biotechnology vs. Cullinan Oncology LLC | Sana Biotechnology vs. Zentalis Pharmaceuticals Llc | Sana Biotechnology vs. X4 Pharmaceuticals |
| Arcus Biosciences vs. Cullinan Oncology LLC | Arcus Biosciences vs. Annexon | Arcus Biosciences vs. Structure Therapeutics American | Arcus Biosciences vs. Relay Therapeutics |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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