Correlation Between SAB Biotherapeutics and LakeShore Biopharma

Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and LakeShore Biopharma 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 SAB Biotherapeutics and LakeShore Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SAB Biotherapeutics and LakeShore Biopharma Co,, you can compare the effects of market volatilities on SAB Biotherapeutics and LakeShore Biopharma 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 SAB Biotherapeutics with a short position of LakeShore Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and LakeShore Biopharma.

Diversification Opportunities for SAB Biotherapeutics and LakeShore Biopharma

-0.73

Correlation Coefficient

SAB Biotherapeutics  LakeShore Biopharma

Pay attention - limited upside

The 3 months correlation between SAB and LakeShore is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and LakeShore Biopharma Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LakeShore Biopharma Co, and SAB Biotherapeutics 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 SAB Biotherapeutics are associated (or correlated) with LakeShore Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LakeShore Biopharma Co, has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and LakeShore Biopharma go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and LakeShore Biopharma

Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 12.49 times more return on investment than LakeShore Biopharma. However, SAB Biotherapeutics is 12.49 times more volatile than LakeShore Biopharma Co,. It trades about 0.15 of its potential returns per unit of risk. LakeShore Biopharma Co, is currently generating about -0.01 per unit of risk. If you would invest  2.60  in SAB Biotherapeutics on September 3, 2024 and sell it today you would earn a total of  4.15  from holding SAB Biotherapeutics or generate 159.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	84.38%
Values	Daily Returns

SAB Biotherapeutics  vs.  LakeShore Biopharma Co,

SAB Biotherapeutics

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, SAB Biotherapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

LakeShore Biopharma Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LakeShore Biopharma Co, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SAB Biotherapeutics and LakeShore Biopharma

The main advantage of trading using opposite SAB Biotherapeutics and LakeShore Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, LakeShore Biopharma 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 LakeShore Biopharma will offset losses from the drop in LakeShore Biopharma's long position.

The idea behind SAB Biotherapeutics and LakeShore Biopharma Co, 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.

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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .