Correlation Between Equillium and Seres Therapeutics
Can any of the company-specific risk be diversified away by investing in both Equillium and Seres 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 Equillium and Seres Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Seres Therapeutics, you can compare the effects of market volatilities on Equillium and Seres 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 Equillium with a short position of Seres Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Seres Therapeutics.
Diversification Opportunities for Equillium and Seres Therapeutics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equillium and Seres is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres Therapeutics and Equillium 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 Equillium are associated (or correlated) with Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of Equillium i.e., Equillium and Seres Therapeutics go up and down completely randomly.
Pair Corralation between Equillium and Seres Therapeutics
Allowing for the 90-day total investment horizon Equillium is expected to generate 0.96 times more return on investment than Seres Therapeutics. However, Equillium is 1.04 times less risky than Seres Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Seres Therapeutics is currently generating about -0.02 per unit of risk. If you would invest 122.00 in Equillium on September 4, 2024 and sell it today you would lose (51.00) from holding Equillium or give up 41.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equillium vs. Seres Therapeutics
Performance |
| Timeline |
| Equillium |
| Seres Therapeutics |
Equillium and Seres Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equillium and Seres Therapeutics
The main advantage of trading using opposite Equillium and Seres Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium position performs unexpectedly, Seres 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 Seres Therapeutics will offset losses from the drop in Seres Therapeutics' long position.| Equillium vs. Candel Therapeutics | Equillium vs. Cingulate Warrants | Equillium vs. Unicycive Therapeutics | Equillium vs. Quoin Pharmaceuticals Ltd |
| Seres Therapeutics vs. Candel Therapeutics | Seres Therapeutics vs. Cingulate Warrants | Seres Therapeutics vs. Unicycive Therapeutics | Seres Therapeutics vs. Quoin Pharmaceuticals Ltd |
Check out your portfolio center.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.
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