Correlation Between Sana Biotechnology and Atara Biotherapeutics

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

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

Diversification Opportunities for Sana Biotechnology and Atara Biotherapeutics

-0.2

Correlation Coefficient

Sana Biotechnology  Atara Biotherapeutics

Good diversification

The 3 months correlation between Sana and Atara is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Atara Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atara Biotherapeutics and Sana Biotechnology 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 Sana Biotechnology are associated (or correlated) with Atara Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atara Biotherapeutics has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Atara Biotherapeutics go up and down completely randomly.

Pair Corralation between Sana Biotechnology and Atara Biotherapeutics

Given the investment horizon of 90 days Sana Biotechnology is expected to generate 2.4 times more return on investment than Atara Biotherapeutics. However, Sana Biotechnology is 2.4 times more volatile than Atara Biotherapeutics. It trades about 0.07 of its potential returns per unit of risk. Atara Biotherapeutics is currently generating about -0.06 per unit of risk. If you would invest  161.00  in Sana Biotechnology on December 27, 2024 and sell it today you would earn a total of  20.00  from holding Sana Biotechnology or generate 12.42% return on investment over 90 days.

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

Sana Biotechnology  vs.  Atara Biotherapeutics

Sana Biotechnology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sana Biotechnology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sana Biotechnology sustained solid returns over the last few months and may actually be approaching a breakup point.

Atara Biotherapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atara Biotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sana Biotechnology and Atara Biotherapeutics

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

The idea behind Sana Biotechnology and Atara Biotherapeutics 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.