Correlation Between SFL and Abcellera Biologics
Can any of the company-specific risk be diversified away by investing in both SFL and Abcellera Biologics 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 SFL and Abcellera Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and Abcellera Biologics, you can compare the effects of market volatilities on SFL and Abcellera Biologics 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 SFL with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Abcellera Biologics.
Diversification Opportunities for SFL and Abcellera Biologics
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SFL and Abcellera is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and SFL 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 SFL Corporation are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of SFL i.e., SFL and Abcellera Biologics go up and down completely randomly.
Pair Corralation between SFL and Abcellera Biologics
Considering the 90-day investment horizon SFL Corporation is expected to generate 0.29 times more return on investment than Abcellera Biologics. However, SFL Corporation is 3.4 times less risky than Abcellera Biologics. It trades about 0.08 of its potential returns per unit of risk. Abcellera Biologics is currently generating about -0.02 per unit of risk. If you would invest 1,077 in SFL Corporation on August 27, 2024 and sell it today you would earn a total of 22.00 from holding SFL Corporation or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFL Corp. vs. Abcellera Biologics
Performance |
| Timeline |
| SFL Corporation |
| Abcellera Biologics |
SFL and Abcellera Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and Abcellera Biologics
The main advantage of trading using opposite SFL and Abcellera Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL position performs unexpectedly, Abcellera Biologics 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 Abcellera Biologics will offset losses from the drop in Abcellera Biologics' long position.The idea behind SFL Corporation and Abcellera Biologics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Abcellera Biologics vs. Hepion Pharmaceuticals | Abcellera Biologics vs. Krystal Biotech | Abcellera Biologics vs. CureVac NV | Abcellera Biologics vs. Vir 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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