Correlation Between SAB Biotherapeutics and Dominari Holdings

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

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

Diversification Opportunities for SAB Biotherapeutics and Dominari Holdings

-0.7

Correlation Coefficient

SAB Biotherapeutics  Dominari Holdings

Excellent diversification

The 3 months correlation between SAB and Dominari is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Dominari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominari Holdings and SAB Biotherapeutics 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 SAB Biotherapeutics are associated (or correlated) with Dominari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominari Holdings has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Dominari Holdings go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and Dominari Holdings

Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 1.65 times more return on investment than Dominari Holdings. However, SAB Biotherapeutics is 1.65 times more volatile than Dominari Holdings. It trades about 0.0 of its potential returns per unit of risk. Dominari Holdings is currently generating about -0.05 per unit of risk. If you would invest  890.00  in SAB Biotherapeutics on October 4, 2024 and sell it today you would lose (515.00) from holding SAB Biotherapeutics or give up 57.87% of portfolio value over 90 days.

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

SAB Biotherapeutics  vs.  Dominari Holdings

SAB Biotherapeutics

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, SAB Biotherapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Dominari Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dominari Holdings 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 primary indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with SAB Biotherapeutics and Dominari Holdings

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

The idea behind SAB Biotherapeutics and Dominari Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .