Correlation Between Saniona AB and ExpreS2ion Biotech

Can any of the company-specific risk be diversified away by investing in both Saniona AB and ExpreS2ion Biotech 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 ExpreS2ion Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Saniona AB and ExpreS2ion Biotech Holding, you can compare the effects of market volatilities on Saniona AB and ExpreS2ion Biotech 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 ExpreS2ion Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saniona AB and ExpreS2ion Biotech.

Diversification Opportunities for Saniona AB and ExpreS2ion Biotech

0.51

Correlation Coefficient

Saniona AB  ExpreS2ion Biotech

Very weak diversification

The 3 months correlation between Saniona and ExpreS2ion is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Saniona AB and ExpreS2ion Biotech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExpreS2ion Biotech 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 ExpreS2ion Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExpreS2ion Biotech has no effect on the direction of Saniona AB i.e., Saniona AB and ExpreS2ion Biotech go up and down completely randomly.

Pair Corralation between Saniona AB and ExpreS2ion Biotech

Assuming the 90 days trading horizon Saniona AB is expected to generate 1.88 times more return on investment than ExpreS2ion Biotech. However, Saniona AB is 1.88 times more volatile than ExpreS2ion Biotech Holding. It trades about 0.11 of its potential returns per unit of risk. ExpreS2ion Biotech Holding is currently generating about -0.11 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.  ExpreS2ion Biotech Holding

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.

ExpreS2ion Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ExpreS2ion Biotech Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Saniona AB and ExpreS2ion Biotech

The main advantage of trading using opposite Saniona AB and ExpreS2ion Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saniona AB position performs unexpectedly, ExpreS2ion Biotech 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 ExpreS2ion Biotech will offset losses from the drop in ExpreS2ion Biotech's long position.

The idea behind Saniona AB and ExpreS2ion Biotech Holding 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.