Correlation Between SAB Biotherapeutics and Salarius Pharmaceuticals

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

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

Diversification Opportunities for SAB Biotherapeutics and Salarius Pharmaceuticals

0.57

Correlation Coefficient

SAB Biotherapeutics  Salarius Pharmaceuticals

Very weak diversification

The 3 months correlation between SAB and Salarius is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Salarius Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salarius Pharmaceuticals 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 Salarius Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salarius Pharmaceuticals has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Salarius Pharmaceuticals go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and Salarius Pharmaceuticals

Given the investment horizon of 90 days SAB Biotherapeutics is expected to under-perform the Salarius Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, SAB Biotherapeutics is 2.22 times less risky than Salarius Pharmaceuticals. The stock trades about -0.13 of its potential returns per unit of risk. The Salarius Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  152.00  in Salarius Pharmaceuticals on December 28, 2024 and sell it today you would lose (60.00) from holding Salarius Pharmaceuticals or give up 39.47% of portfolio value over 90 days.

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

SAB Biotherapeutics  vs.  Salarius Pharmaceuticals

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 weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Salarius Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salarius Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Salarius Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAB Biotherapeutics and Salarius Pharmaceuticals

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

The idea behind SAB Biotherapeutics and Salarius Pharmaceuticals 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.