Correlation Between Sana Biotechnology and Tempest Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sana Biotechnology and Tempest 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 Tempest 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 Tempest Therapeutics, you can compare the effects of market volatilities on Sana Biotechnology and Tempest 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 Tempest Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and Tempest Therapeutics.
Diversification Opportunities for Sana Biotechnology and Tempest Therapeutics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sana and Tempest is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Tempest Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempest 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 Tempest Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempest Therapeutics has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Tempest Therapeutics go up and down completely randomly.
Pair Corralation between Sana Biotechnology and Tempest Therapeutics
Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the Tempest Therapeutics. In addition to that, Sana Biotechnology is 2.04 times more volatile than Tempest Therapeutics. It trades about -0.12 of its total potential returns per unit of risk. Tempest Therapeutics is currently generating about -0.14 per unit of volatility. If you would invest 94.00 in Tempest Therapeutics on November 27, 2024 and sell it today you would lose (7.00) from holding Tempest Therapeutics or give up 7.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sana Biotechnology vs. Tempest Therapeutics
Performance |
| Timeline |
| Sana Biotechnology |
| Tempest Therapeutics |
Sana Biotechnology and Tempest Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sana Biotechnology and Tempest Therapeutics
The main advantage of trading using opposite Sana Biotechnology and Tempest Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana Biotechnology position performs unexpectedly, Tempest 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 Tempest Therapeutics will offset losses from the drop in Tempest 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 |
| Tempest Therapeutics vs. Indaptus Therapeutics | Tempest Therapeutics vs. Rezolute | Tempest Therapeutics vs. Forte Biosciences | Tempest Therapeutics vs. Sana Biotechnology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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