Correlation Between Fresh Tracks and SAB Biotherapeutics

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

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

Diversification Opportunities for Fresh Tracks and SAB Biotherapeutics

0.0

Correlation Coefficient

Fresh Tracks  SAB Biotherapeutics

Pay attention - limited upside

The 3 months correlation between Fresh and SAB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Tracks Therapeutics and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and Fresh Tracks 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 Fresh Tracks Therapeutics 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 Fresh Tracks i.e., Fresh Tracks and SAB Biotherapeutics go up and down completely randomly.

Pair Corralation between Fresh Tracks and SAB Biotherapeutics

If you would invest (100.00) in Fresh Tracks Therapeutics on December 1, 2024 and sell it today you would earn a total of  100.00  from holding Fresh Tracks Therapeutics or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fresh Tracks Therapeutics  vs.  SAB Biotherapeutics

Fresh Tracks Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fresh Tracks Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Fresh Tracks is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Fresh Tracks and SAB Biotherapeutics

The main advantage of trading using opposite Fresh Tracks and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Tracks 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 Fresh Tracks Therapeutics 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.