Correlation Between Sana Biotechnology and Conduit Pharmaceuticals

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

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

Diversification Opportunities for Sana Biotechnology and Conduit Pharmaceuticals

-0.05

Correlation Coefficient

Sana Biotechnology  Conduit Pharmaceuticals

Good diversification

The 3 months correlation between Sana and Conduit is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Conduit Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conduit Pharmaceuticals 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 Conduit Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conduit Pharmaceuticals has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Conduit Pharmaceuticals go up and down completely randomly.

Pair Corralation between Sana Biotechnology and Conduit Pharmaceuticals

Given the investment horizon of 90 days Sana Biotechnology is expected to generate 1.29 times more return on investment than Conduit Pharmaceuticals. However, Sana Biotechnology is 1.29 times more volatile than Conduit Pharmaceuticals. It trades about 0.07 of its potential returns per unit of risk. Conduit Pharmaceuticals is currently generating about -0.12 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.  Conduit Pharmaceuticals

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.

Conduit Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Conduit Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators 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.

Pair Trading with Sana Biotechnology and Conduit Pharmaceuticals

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

The idea behind Sana Biotechnology and Conduit 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.