Correlation Between SAB Biotherapeutics and Vaccinex

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

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

Diversification Opportunities for SAB Biotherapeutics and Vaccinex

-0.02

Correlation Coefficient

SAB Biotherapeutics  Vaccinex

Good diversification

The 3 months correlation between SAB and Vaccinex is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Vaccinex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaccinex 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 Vaccinex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaccinex has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Vaccinex go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and Vaccinex

Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 0.89 times more return on investment than Vaccinex. However, SAB Biotherapeutics is 1.13 times less risky than Vaccinex. It trades about 0.04 of its potential returns per unit of risk. Vaccinex is currently generating about -0.02 per unit of risk. If you would invest  293.00  in SAB Biotherapeutics on September 2, 2024 and sell it today you would lose (1.00) from holding SAB Biotherapeutics or give up 0.34% of portfolio value over 90 days.

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

SAB Biotherapeutics  vs.  Vaccinex

SAB Biotherapeutics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 2 (%) 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.

Vaccinex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vaccinex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SAB Biotherapeutics and Vaccinex

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

The idea behind SAB Biotherapeutics and Vaccinex 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.