Correlation Between Sana Biotechnology and Crispr Therapeutics

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

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

Diversification Opportunities for Sana Biotechnology and Crispr Therapeutics

0.91

Correlation Coefficient

Sana Biotechnology  Crispr Therapeutics

Almost no diversification

The 3 months correlation between Sana and Crispr is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sana Biotechnology and Crispr Therapeutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crispr Therapeutics 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 Crispr Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crispr Therapeutics has no effect on the direction of Sana Biotechnology i.e., Sana Biotechnology and Crispr Therapeutics go up and down completely randomly.

Pair Corralation between Sana Biotechnology and Crispr Therapeutics

Given the investment horizon of 90 days Sana Biotechnology is expected to generate 1.7 times more return on investment than Crispr Therapeutics. However, Sana Biotechnology is 1.7 times more volatile than Crispr Therapeutics AG. It trades about 0.08 of its potential returns per unit of risk. Crispr Therapeutics AG is currently generating about 0.03 per unit of risk. If you would invest  171.00  in Sana Biotechnology on February 26, 2025 and sell it today you would earn a total of  29.00  from holding Sana Biotechnology or generate 16.96% return on investment over 90 days.

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

Sana Biotechnology  vs.  Crispr Therapeutics AG

Sana Biotechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sana Biotechnology 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 current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Crispr Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crispr Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Sana Biotechnology and Crispr Therapeutics

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

The idea behind Sana Biotechnology and Crispr Therapeutics AG 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.