Correlation Between Zura Bio and SAB Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Zura Bio and SAB Biotherapeutics 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 Zura Bio and SAB Biotherapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zura Bio Limited and SAB Biotherapeutics, you can compare the effects of market volatilities on Zura Bio and SAB Biotherapeutics 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 Zura Bio with a short position of SAB Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zura Bio and SAB Biotherapeutics.
Diversification Opportunities for Zura Bio and SAB Biotherapeutics
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zura and SAB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Zura Bio Limited and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and Zura Bio 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 Zura Bio Limited are associated (or correlated) with SAB Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Biotherapeutics has no effect on the direction of Zura Bio i.e., Zura Bio and SAB Biotherapeutics go up and down completely randomly.
Pair Corralation between Zura Bio and SAB Biotherapeutics
Given the investment horizon of 90 days Zura Bio Limited is expected to under-perform the SAB Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Zura Bio Limited is 4.35 times less risky than SAB Biotherapeutics. The stock trades about -0.39 of its potential returns per unit of risk. The SAB Biotherapeutics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 5.34 in SAB Biotherapeutics on August 23, 2024 and sell it today you would earn a total of 1.35 from holding SAB Biotherapeutics or generate 25.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
Zura Bio Limited vs. SAB Biotherapeutics
Performance |
| Timeline |
| Zura Bio Limited |
| SAB Biotherapeutics |
Zura Bio and SAB Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zura Bio and SAB Biotherapeutics
The main advantage of trading using opposite Zura Bio and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zura Bio position performs unexpectedly, SAB Biotherapeutics 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 SAB Biotherapeutics will offset losses from the drop in SAB Biotherapeutics' long position.| Zura Bio vs. Volaris | Zura Bio vs. Western Acquisition Ventures | Zura Bio vs. SFL Corporation | Zura Bio vs. Mesa Air Group |
| SAB Biotherapeutics vs. ZyVersa Therapeutics | SAB Biotherapeutics vs. Sonnet Biotherapeutics Holdings | SAB Biotherapeutics vs. Zura Bio Limited | SAB Biotherapeutics vs. Phio Pharmaceuticals Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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