Correlation Between G1 Therapeutics and Sana Biotechnology

Can any of the company-specific risk be diversified away by investing in both G1 Therapeutics and Sana Biotechnology 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 G1 Therapeutics and Sana Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G1 Therapeutics and Sana Biotechnology, you can compare the effects of market volatilities on G1 Therapeutics and Sana Biotechnology 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 G1 Therapeutics with a short position of Sana Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of G1 Therapeutics and Sana Biotechnology.

Diversification Opportunities for G1 Therapeutics and Sana Biotechnology

-0.94

Correlation Coefficient

G1 Therapeutics  Sana Biotechnology

Pay attention - limited upside

The 3 months correlation between GTHX and Sana is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding G1 Therapeutics and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology and G1 Therapeutics 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 G1 Therapeutics are associated (or correlated) with Sana Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sana Biotechnology has no effect on the direction of G1 Therapeutics i.e., G1 Therapeutics and Sana Biotechnology go up and down completely randomly.

Pair Corralation between G1 Therapeutics and Sana Biotechnology

If you would invest  715.00  in G1 Therapeutics on September 19, 2024 and sell it today you would earn a total of  0.00  from holding G1 Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

G1 Therapeutics  vs.  Sana Biotechnology

G1 Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G1 Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, G1 Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with G1 Therapeutics and Sana Biotechnology

The main advantage of trading using opposite G1 Therapeutics and Sana Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G1 Therapeutics position performs unexpectedly, Sana Biotechnology 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 Sana Biotechnology will offset losses from the drop in Sana Biotechnology's long position.

The idea behind G1 Therapeutics and Sana Biotechnology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.