Correlation Between SAB Biotherapeutics and Instil Bio

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

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

Diversification Opportunities for SAB Biotherapeutics and Instil Bio

0.0

Correlation Coefficient

SAB Biotherapeutics  Instil Bio

Pay attention - limited upside

The 3 months correlation between SAB and Instil is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Instil Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Instil Bio and SAB Biotherapeutics 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 SAB Biotherapeutics are associated (or correlated) with Instil Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Instil Bio has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Instil Bio go up and down completely randomly.

Pair Corralation between SAB Biotherapeutics and Instil Bio

Given the investment horizon of 90 days SAB Biotherapeutics is expected to generate 1.48 times more return on investment than Instil Bio. However, SAB Biotherapeutics is 1.48 times more volatile than Instil Bio. It trades about 0.22 of its potential returns per unit of risk. Instil Bio is currently generating about -0.22 per unit of risk. If you would invest  247.00  in SAB Biotherapeutics on August 13, 2024 and sell it today you would earn a total of  104.00  from holding SAB Biotherapeutics or generate 42.11% return on investment over 90 days.

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

SAB Biotherapeutics  vs.  Instil Bio

SAB Biotherapeutics

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAB Biotherapeutics are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, SAB Biotherapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Instil Bio

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Instil Bio are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Instil Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAB Biotherapeutics and Instil Bio

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

The idea behind SAB Biotherapeutics and Instil Bio 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.