Correlation Between Socket Mobile and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Socket Mobile 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 Socket Mobile and Sellas Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socket Mobile and Sellas Life Sciences, you can compare the effects of market volatilities on Socket Mobile 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 Socket Mobile with a short position of Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socket Mobile and Sellas Life.
Diversification Opportunities for Socket Mobile and Sellas Life
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Socket and Sellas is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Socket Mobile 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 Socket Mobile 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 Socket Mobile 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 Socket Mobile i.e., Socket Mobile and Sellas Life go up and down completely randomly.
Pair Corralation between Socket Mobile and Sellas Life
Given the investment horizon of 90 days Socket Mobile is expected to generate 1.61 times less return on investment than Sellas Life. But when comparing it to its historical volatility, Socket Mobile is 1.75 times less risky than Sellas Life. It trades about 0.04 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Sellas Life Sciences on September 4, 2024 and sell it today you would earn a total of 13.00 from holding Sellas Life Sciences or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socket Mobile vs. Sellas Life Sciences
Performance |
| Timeline |
| Socket Mobile |
| Sellas Life Sciences |
Socket Mobile and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Socket Mobile and Sellas Life
The main advantage of trading using opposite Socket Mobile and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socket Mobile 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.| Socket Mobile vs. Rigetti Computing | Socket Mobile vs. D Wave Quantum | Socket Mobile vs. IONQ Inc | Socket Mobile vs. Desktop Metal |
| Sellas Life vs. Candel Therapeutics | Sellas Life vs. Cingulate Warrants | Sellas Life vs. Unicycive Therapeutics | Sellas Life vs. Cardio Diagnostics Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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