Correlation Between Sana Biotechnology and Natera

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

By analyzing existing cross correlation between Sana Biotechnology and Natera Inc, you can compare the effects of market volatilities on Sana Biotechnology and Natera 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 Natera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sana Biotechnology and Natera.

Diversification Opportunities for Sana Biotechnology and Natera

-0.86

Correlation Coefficient

Sana Biotechnology  Natera

Pay attention - limited upside

The 3 months correlation between Sana and Natera is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Natera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natera Inc 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 Natera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natera Inc has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Natera go up and down completely randomly.

Pair Corralation between Sana Biotechnology and Natera

Given the investment horizon of 90 days Sana Biotechnology is expected to under-perform the Natera. In addition to that, Sana Biotechnology is 1.83 times more volatile than Natera Inc. It trades about 0.0 of its total potential returns per unit of risk. Natera Inc is currently generating about 0.11 per unit of volatility. If you would invest  3,849  in Natera Inc on September 24, 2024 and sell it today you would earn a total of  12,339  from holding Natera Inc or generate 320.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sana Biotechnology  vs.  Natera Inc

Sana Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sana Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Natera Inc

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Natera Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Natera sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sana Biotechnology and Natera

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

The idea behind Sana Biotechnology and Natera Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.