Correlation Between HAVN Life and Surrozen Warrant

Can any of the company-specific risk be diversified away by investing in both HAVN Life and Surrozen Warrant 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 HAVN Life and Surrozen Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HAVN Life Sciences and Surrozen Warrant, you can compare the effects of market volatilities on HAVN Life and Surrozen Warrant 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 HAVN Life with a short position of Surrozen Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAVN Life and Surrozen Warrant.

Diversification Opportunities for HAVN Life and Surrozen Warrant

0.26

Correlation Coefficient

HAVN Life  Surrozen Warrant

Modest diversification

The 3 months correlation between HAVN and Surrozen is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding HAVN Life Sciences and Surrozen Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surrozen Warrant and HAVN Life 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 HAVN Life Sciences are associated (or correlated) with Surrozen Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surrozen Warrant has no effect on the direction of HAVN Life i.e., HAVN Life and Surrozen Warrant go up and down completely randomly.

Pair Corralation between HAVN Life and Surrozen Warrant

Assuming the 90 days horizon HAVN Life Sciences is expected to generate 7.99 times more return on investment than Surrozen Warrant. However, HAVN Life is 7.99 times more volatile than Surrozen Warrant. It trades about 0.18 of its potential returns per unit of risk. Surrozen Warrant is currently generating about 0.36 per unit of risk. If you would invest  0.52  in HAVN Life Sciences on October 9, 2024 and sell it today you would lose (0.42) from holding HAVN Life Sciences or give up 80.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	68.42%
Values	Daily Returns

HAVN Life Sciences  vs.  Surrozen Warrant

HAVN Life Sciences

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HAVN Life Sciences are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, HAVN Life reported solid returns over the last few months and may actually be approaching a breakup point.

Surrozen Warrant

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Surrozen Warrant are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Surrozen Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HAVN Life and Surrozen Warrant

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

The idea behind HAVN Life Sciences and Surrozen Warrant 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.