Correlation Between Sana Biotechnology and Design Therapeutics
Can any of the company-specific risk be diversified away by investing in both Sana Biotechnology and Design 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 Design 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 Design Therapeutics, you can compare the effects of market volatilities on Sana Biotechnology and Design 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 Design Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and Design Therapeutics.
Diversification Opportunities for Sana Biotechnology and Design Therapeutics
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sana and Design is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Design Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Design 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 Design Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Design Therapeutics has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Design Therapeutics go up and down completely randomly.
Pair Corralation between Sana Biotechnology and Design Therapeutics
Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the Design Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Sana Biotechnology is 1.07 times less risky than Design Therapeutics. The stock trades about -0.17 of its potential returns per unit of risk. The Design Therapeutics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 372.00 in Design Therapeutics on September 24, 2024 and sell it today you would earn a total of 253.00 from holding Design Therapeutics or generate 68.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sana Biotechnology vs. Design Therapeutics
Performance |
Timeline |
Sana Biotechnology |
Design Therapeutics |
Sana Biotechnology and Design Therapeutics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sana Biotechnology and Design Therapeutics
The main advantage of trading using opposite Sana Biotechnology and Design Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sana Biotechnology position performs unexpectedly, Design 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 Design Therapeutics will offset losses from the drop in Design 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 |
Design Therapeutics vs. Fate Therapeutics | Design Therapeutics vs. Sana Biotechnology | Design Therapeutics vs. Caribou Biosciences | Design Therapeutics vs. Arcus 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |