Correlation Between SAB Biotherapeutics and Field Trip

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

By analyzing existing cross correlation between SAB Biotherapeutics and Field Trip Health, you can compare the effects of market volatilities on SAB Biotherapeutics and Field Trip 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 Field Trip. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Field Trip.

Diversification Opportunities for SAB Biotherapeutics and Field Trip

-0.19

Correlation Coefficient

SAB Biotherapeutics  Field Trip

Good diversification

The 3 months correlation between SAB and Field is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Field Trip Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Field Trip Health 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 Field Trip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Field Trip Health has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Field Trip go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and Field Trip

If you would invest  385.00  in SAB Biotherapeutics on October 12, 2024 and sell it today you would earn a total of  18.00  from holding SAB Biotherapeutics or generate 4.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

SAB Biotherapeutics  vs.  Field Trip Health

SAB Biotherapeutics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 9 (%) 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.

Field Trip Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Field Trip Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Field Trip is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SAB Biotherapeutics and Field Trip

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

The idea behind SAB Biotherapeutics and Field Trip Health 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.