Correlation Between Alligator Bioscience and Saniona AB

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

By analyzing existing cross correlation between Alligator Bioscience AB and Saniona AB, you can compare the effects of market volatilities on Alligator Bioscience and Saniona AB 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 Alligator Bioscience with a short position of Saniona AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alligator Bioscience and Saniona AB.

Diversification Opportunities for Alligator Bioscience and Saniona AB

-0.27

Correlation Coefficient

Alligator Bioscience  Saniona AB

Very good diversification

The 3 months correlation between Alligator and Saniona is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Alligator Bioscience AB and Saniona AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saniona AB and Alligator Bioscience 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 Alligator Bioscience AB are associated (or correlated) with Saniona AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saniona AB has no effect on the direction of Alligator Bioscience i.e., Alligator Bioscience and Saniona AB go up and down completely randomly.

Pair Corralation between Alligator Bioscience and Saniona AB

Assuming the 90 days trading horizon Alligator Bioscience AB is expected to generate 25.18 times more return on investment than Saniona AB. However, Alligator Bioscience is 25.18 times more volatile than Saniona AB. It trades about 0.16 of its potential returns per unit of risk. Saniona AB is currently generating about 0.06 per unit of risk. If you would invest  4.72  in Alligator Bioscience AB on November 29, 2024 and sell it today you would earn a total of  7.28  from holding Alligator Bioscience AB or generate 154.24% return on investment over 90 days.

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

Alligator Bioscience AB  vs.  Saniona AB

Alligator Bioscience

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alligator Bioscience AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alligator Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Saniona AB

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saniona AB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Saniona AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alligator Bioscience and Saniona AB

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

The idea behind Alligator Bioscience AB and Saniona AB 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.