Correlation Between Jasper Therapeutics and SAB Biotherapeutics

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

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

Diversification Opportunities for Jasper Therapeutics and SAB Biotherapeutics

0.62

Correlation Coefficient

Jasper Therapeutics  SAB Biotherapeutics

Poor diversification

The 3 months correlation between Jasper and SAB is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jasper Therapeutics and SAB Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAB Biotherapeutics and Jasper 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 Jasper 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 Jasper Therapeutics i.e., Jasper Therapeutics and SAB Biotherapeutics go up and down completely randomly.

Pair Corralation between Jasper Therapeutics and SAB Biotherapeutics

Given the investment horizon of 90 days Jasper Therapeutics is expected to under-perform the SAB Biotherapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Jasper Therapeutics is 1.19 times less risky than SAB Biotherapeutics. The stock trades about -0.17 of its potential returns per unit of risk. The SAB Biotherapeutics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  281.00  in SAB Biotherapeutics on December 2, 2024 and sell it today you would lose (110.00) from holding SAB Biotherapeutics or give up 39.15% of portfolio value over 90 days.

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

Jasper Therapeutics  vs.  SAB Biotherapeutics

Jasper Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jasper Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail 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 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 Jasper Therapeutics and SAB Biotherapeutics

The main advantage of trading using opposite Jasper Therapeutics and SAB Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jasper Therapeutics 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 Jasper 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.