Correlation Between Intellia Therapeutics and Sana Biotechnology

Can any of the company-specific risk be diversified away by investing in both Intellia 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 Intellia 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 Intellia Therapeutics and Sana Biotechnology, you can compare the effects of market volatilities on Intellia 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 Intellia Therapeutics with a short position of Sana Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intellia Therapeutics and Sana Biotechnology.

Diversification Opportunities for Intellia Therapeutics and Sana Biotechnology

0.76

Correlation Coefficient

Intellia Therapeutics  Sana Biotechnology

Poor diversification

The 3 months correlation between Intellia and Sana is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Intellia Therapeutics and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology and Intellia 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 Intellia 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 Intellia Therapeutics i.e., Intellia Therapeutics and Sana Biotechnology go up and down completely randomly.

Pair Corralation between Intellia Therapeutics and Sana Biotechnology

Given the investment horizon of 90 days Intellia Therapeutics is expected to under-perform the Sana Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Intellia Therapeutics is 4.32 times less risky than Sana Biotechnology. The stock trades about -0.19 of its potential returns per unit of risk. The Sana Biotechnology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  401.00  in Sana Biotechnology on October 13, 2024 and sell it today you would lose (35.00) from holding Sana Biotechnology or give up 8.73% of portfolio value over 90 days.

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

Intellia Therapeutics  vs.  Sana Biotechnology

Intellia Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intellia Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sana Biotechnology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sana Biotechnology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sana Biotechnology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intellia Therapeutics and Sana Biotechnology

The main advantage of trading using opposite Intellia Therapeutics and Sana Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intellia 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 Intellia 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.