Correlation Between Seres Therapeutics and Sanofi ADR
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics and Sanofi ADR 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 Sanofi ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Sanofi ADR, you can compare the effects of market volatilities on Seres Therapeutics and Sanofi ADR 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 Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Sanofi ADR.
Diversification Opportunities for Seres Therapeutics and Sanofi ADR
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seres and Sanofi is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR 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 Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Seres Therapeutics i.e., Seres Therapeutics and Sanofi ADR go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Sanofi ADR
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 3.02 times less return on investment than Sanofi ADR. In addition to that, Seres Therapeutics is 4.77 times more volatile than Sanofi ADR. It trades about 0.03 of its total potential returns per unit of risk. Sanofi ADR is currently generating about 0.42 per unit of volatility. If you would invest 4,819 in Sanofi ADR on November 3, 2024 and sell it today you would earn a total of 615.00 from holding Sanofi ADR or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Sanofi ADR
Performance |
| Timeline |
| Seres Therapeutics |
| Sanofi ADR |
Seres Therapeutics and Sanofi ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Sanofi ADR
The main advantage of trading using opposite Seres Therapeutics and Sanofi ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics position performs unexpectedly, Sanofi ADR 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 Sanofi ADR will offset losses from the drop in Sanofi ADR's long position.| Seres Therapeutics vs. Syros Pharmaceuticals | Seres Therapeutics vs. Iovance Biotherapeutics | Seres Therapeutics vs. Veracyte | Seres Therapeutics vs. Fate Therapeutics |
| Sanofi ADR vs. AstraZeneca PLC ADR | Sanofi ADR vs. Roche Holding Ltd | Sanofi ADR vs. GlaxoSmithKline PLC ADR | Sanofi ADR vs. Merck Company |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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