Correlation Between Sana Biotechnology and ADMA Biologics
Can any of the company-specific risk be diversified away by investing in both Sana Biotechnology and ADMA 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 Sana Biotechnology and ADMA Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sana Biotechnology and ADMA Biologics, you can compare the effects of market volatilities on Sana Biotechnology and ADMA 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 Sana Biotechnology with a short position of ADMA Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and ADMA Biologics.
Diversification Opportunities for Sana Biotechnology and ADMA Biologics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sana and ADMA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and ADMA Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADMA Biologics 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 ADMA Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADMA Biologics has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and ADMA Biologics go up and down completely randomly.
Pair Corralation between Sana Biotechnology and ADMA Biologics
Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the ADMA Biologics. In addition to that, Sana Biotechnology is 1.25 times more volatile than ADMA Biologics. It trades about -0.21 of its total potential returns per unit of risk. ADMA Biologics is currently generating about -0.01 per unit of volatility. If you would invest 1,949 in ADMA Biologics on September 25, 2024 and sell it today you would lose (177.00) from holding ADMA Biologics or give up 9.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sana Biotechnology vs. ADMA Biologics
Performance |
Timeline |
Sana Biotechnology |
ADMA Biologics |
Sana Biotechnology and ADMA Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sana Biotechnology and ADMA Biologics
The main advantage of trading using opposite Sana Biotechnology and ADMA Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana Biotechnology position performs unexpectedly, ADMA 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 ADMA Biologics will offset losses from the drop in ADMA Biologics' long position.Sana Biotechnology vs. Fate Therapeutics | Sana Biotechnology vs. Caribou Biosciences | Sana Biotechnology vs. Arcus Biosciences | Sana Biotechnology vs. Karyopharm Therapeutics |
ADMA Biologics vs. Atara Biotherapeutics | ADMA Biologics vs. Fate Therapeutics | ADMA Biologics vs. Sana Biotechnology | ADMA Biologics vs. Caribou Biosciences |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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