Correlation Between Sana Biotechnology and Absci Corp

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

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

Diversification Opportunities for Sana Biotechnology and Absci Corp

0.31

Correlation Coefficient

Sana Biotechnology  Absci Corp

Weak diversification

The 3 months correlation between Sana and Absci is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Absci Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absci Corp 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 Absci Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absci Corp has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Absci Corp go up and down completely randomly.

Pair Corralation between Sana Biotechnology and Absci Corp

Given the investment horizon of 90 days Sana Biotechnology is expected to generate 3.84 times less return on investment than Absci Corp. In addition to that, Sana Biotechnology is 1.06 times more volatile than Absci Corp. It trades about 0.02 of its total potential returns per unit of risk. Absci Corp is currently generating about 0.1 per unit of volatility. If you would invest  126.00  in Absci Corp on August 15, 2024 and sell it today you would earn a total of  238.00  from holding Absci Corp or generate 188.89% return on investment over 90 days.

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

Sana Biotechnology  vs.  Absci Corp

Sana Biotechnology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sana Biotechnology 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.

Absci Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Absci Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Sana Biotechnology and Absci Corp

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

The idea behind Sana Biotechnology and Absci Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.