Correlation Between SilverBox Corp and Abcellera Biologics

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

By analyzing existing cross correlation between SilverBox Corp III and Abcellera Biologics, you can compare the effects of market volatilities on SilverBox Corp and Abcellera Biologics 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 SilverBox Corp with a short position of Abcellera Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverBox Corp and Abcellera Biologics.

Diversification Opportunities for SilverBox Corp and Abcellera Biologics

0.28

Correlation Coefficient

SilverBox Corp  Abcellera Biologics

Modest diversification

The 3 months correlation between SilverBox and Abcellera is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding SilverBox Corp III and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and SilverBox Corp 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 SilverBox Corp III are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of SilverBox Corp i.e., SilverBox Corp and Abcellera Biologics go up and down completely randomly.

Pair Corralation between SilverBox Corp and Abcellera Biologics

Given the investment horizon of 90 days SilverBox Corp is expected to generate 4.02 times less return on investment than Abcellera Biologics. But when comparing it to its historical volatility, SilverBox Corp III is 2.51 times less risky than Abcellera Biologics. It trades about 0.03 of its potential returns per unit of risk. Abcellera Biologics is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  264.00  in Abcellera Biologics on October 20, 2024 and sell it today you would earn a total of  33.00  from holding Abcellera Biologics or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	51.92%
Values	Daily Returns

SilverBox Corp III  vs.  Abcellera Biologics

SilverBox Corp III

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SilverBox Corp III has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SilverBox Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Abcellera Biologics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Abcellera Biologics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak fundamental indicators, Abcellera Biologics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with SilverBox Corp and Abcellera Biologics

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

The idea behind SilverBox Corp III and Abcellera Biologics 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.