Correlation Between Seres Therapeutics and Oxford BioDynamics
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics and Oxford BioDynamics 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 Seres Therapeutics and Oxford BioDynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Oxford BioDynamics Plc, you can compare the effects of market volatilities on Seres Therapeutics and Oxford BioDynamics 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 Seres Therapeutics with a short position of Oxford BioDynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Oxford BioDynamics.
Diversification Opportunities for Seres Therapeutics and Oxford BioDynamics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seres and Oxford is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Oxford BioDynamics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford BioDynamics Plc and Seres Therapeutics 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 Seres Therapeutics are associated (or correlated) with Oxford BioDynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford BioDynamics Plc has no effect on the direction of Seres Therapeutics i.e., Seres Therapeutics and Oxford BioDynamics go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Oxford BioDynamics
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 0.75 times more return on investment than Oxford BioDynamics. However, Seres Therapeutics is 1.34 times less risky than Oxford BioDynamics. It trades about 0.18 of its potential returns per unit of risk. Oxford BioDynamics Plc is currently generating about -0.21 per unit of risk. If you would invest 66.00 in Seres Therapeutics on September 13, 2024 and sell it today you would earn a total of 20.05 from holding Seres Therapeutics or generate 30.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Oxford BioDynamics Plc
Performance |
| Timeline |
| Seres Therapeutics |
| Oxford BioDynamics Plc |
Seres Therapeutics and Oxford BioDynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Oxford BioDynamics
The main advantage of trading using opposite Seres Therapeutics and Oxford BioDynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics position performs unexpectedly, Oxford BioDynamics 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 Oxford BioDynamics will offset losses from the drop in Oxford BioDynamics' long position.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| Oxford BioDynamics vs. Protalix Biotherapeutics | Oxford BioDynamics vs. Seres Therapeutics | Oxford BioDynamics vs. Cidara Therapeutics | Oxford BioDynamics vs. Immunitybio |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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