Correlation Between Getty Realty and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Getty Realty and Sellas Life 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 Getty Realty and Sellas Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Realty and Sellas Life Sciences, you can compare the effects of market volatilities on Getty Realty and Sellas Life 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 Getty Realty with a short position of Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and Sellas Life.
Diversification Opportunities for Getty Realty and Sellas Life
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Getty and Sellas is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences and Getty Realty 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 Getty Realty are associated (or correlated) with Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Getty Realty i.e., Getty Realty and Sellas Life go up and down completely randomly.
Pair Corralation between Getty Realty and Sellas Life
Considering the 90-day investment horizon Getty Realty is expected to generate 0.3 times more return on investment than Sellas Life. However, Getty Realty is 3.29 times less risky than Sellas Life. It trades about 0.15 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about -0.01 per unit of risk. If you would invest 2,612 in Getty Realty on August 26, 2024 and sell it today you would earn a total of 643.00 from holding Getty Realty or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Realty vs. Sellas Life Sciences
Performance |
| Timeline |
| Getty Realty |
| Sellas Life Sciences |
Getty Realty and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Realty and Sellas Life
The main advantage of trading using opposite Getty Realty and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Realty position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.The idea behind Getty Realty and Sellas Life Sciences 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.| Sellas Life vs. Eliem Therapeutics | Sellas Life vs. HCW Biologics | Sellas Life vs. Scpharmaceuticals | Sellas Life vs. Milestone Pharmaceuticals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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