Correlation Between Saniona AB and Alligator Bioscience

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

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

Diversification Opportunities for Saniona AB and Alligator Bioscience

0.57

Correlation Coefficient

Saniona AB  Alligator Bioscience

Very weak diversification

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

Pair Corralation between Saniona AB and Alligator Bioscience

Assuming the 90 days trading horizon Saniona AB is expected to generate 2.44 times more return on investment than Alligator Bioscience. However, Saniona AB is 2.44 times more volatile than Alligator Bioscience AB. It trades about 0.11 of its potential returns per unit of risk. Alligator Bioscience AB is currently generating about -0.2 per unit of risk. If you would invest  435.00  in Saniona AB on August 31, 2024 and sell it today you would earn a total of  265.00  from holding Saniona AB or generate 60.92% return on investment over 90 days.

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

Saniona AB  vs.  Alligator Bioscience AB

Saniona AB

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saniona AB are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Saniona AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Alligator Bioscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alligator Bioscience AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Saniona AB and Alligator Bioscience

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

The idea behind Saniona AB and Alligator Bioscience AB 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.