Correlation Between YS Biopharma and Sonnet Biotherapeutics

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

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

Diversification Opportunities for YS Biopharma and Sonnet Biotherapeutics

0.81

Correlation Coefficient

YS Biopharma  Sonnet Biotherapeutics

Very poor diversification

The 3 months correlation between YS Biopharma and Sonnet is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding YS Biopharma Co, and Sonnet Biotherapeutics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonnet Biotherapeutics and YS Biopharma 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 YS Biopharma Co, are associated (or correlated) with Sonnet Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonnet Biotherapeutics has no effect on the direction of YS Biopharma i.e., YS Biopharma and Sonnet Biotherapeutics go up and down completely randomly.

Pair Corralation between YS Biopharma and Sonnet Biotherapeutics

If you would invest  48.00  in YS Biopharma Co, on September 1, 2024 and sell it today you would earn a total of  0.00  from holding YS Biopharma Co, or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.59%
Values	Daily Returns

YS Biopharma Co,  vs.  Sonnet Biotherapeutics Holding

YS Biopharma Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YS Biopharma Co, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, YS Biopharma is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sonnet Biotherapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sonnet Biotherapeutics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with YS Biopharma and Sonnet Biotherapeutics

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

The idea behind YS Biopharma Co, and Sonnet Biotherapeutics Holdings 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.