Correlation Between Cingulate Warrants and SAB Biotherapeutics

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

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

Diversification Opportunities for Cingulate Warrants and SAB Biotherapeutics

0.31

Correlation Coefficient

Cingulate Warrants  SAB Biotherapeutics

Weak diversification

The 3 months correlation between Cingulate and SAB is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate Warrants and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and Cingulate Warrants 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 Cingulate Warrants are associated (or correlated) with SAB Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAB Biotherapeutics has no effect on the direction of Cingulate Warrants i.e., Cingulate Warrants and SAB Biotherapeutics go up and down completely randomly.

Pair Corralation between Cingulate Warrants and SAB Biotherapeutics

Assuming the 90 days horizon Cingulate Warrants is expected to generate 12.33 times more return on investment than SAB Biotherapeutics. However, Cingulate Warrants is 12.33 times more volatile than SAB Biotherapeutics. It trades about 0.12 of its potential returns per unit of risk. SAB Biotherapeutics is currently generating about 0.01 per unit of risk. If you would invest  25.00  in Cingulate Warrants on December 2, 2024 and sell it today you would lose (21.67) from holding Cingulate Warrants or give up 86.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	78.59%
Values	Daily Returns

Cingulate Warrants  vs.  SAB Biotherapeutics

Cingulate Warrants

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

SAB Biotherapeutics

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Cingulate Warrants and SAB Biotherapeutics

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

The idea behind Cingulate Warrants and SAB Biotherapeutics 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.