Correlation Between SAB Biotherapeutics and Biomx

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

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

Diversification Opportunities for SAB Biotherapeutics and Biomx

-0.53

Correlation Coefficient

SAB Biotherapeutics  Biomx

Excellent diversification

The 3 months correlation between SAB and Biomx is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Biomx Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomx Inc 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 Biomx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomx Inc has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Biomx go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and Biomx

Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 1.26 times less return on investment than Biomx. But when comparing it to its historical volatility, SAB Biotherapeutics is 1.47 times less risky than Biomx. It trades about 0.02 of its potential returns per unit of risk. Biomx Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  187.00  in Biomx Inc on September 20, 2024 and sell it today you would lose (126.00) from holding Biomx Inc or give up 67.38% of portfolio value over 90 days.

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

SAB Biotherapeutics  vs.  Biomx Inc

SAB Biotherapeutics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 5 (%) 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.

Biomx Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Biomx Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with SAB Biotherapeutics and Biomx

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

The idea behind SAB Biotherapeutics and Biomx Inc 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.