Correlation Between Seelos Therapeutics and Opthea
Can any of the company-specific risk be diversified away by investing in both Seelos Therapeutics and Opthea 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 Seelos Therapeutics and Opthea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seelos Therapeutics and Opthea, you can compare the effects of market volatilities on Seelos Therapeutics and Opthea 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 Seelos Therapeutics with a short position of Opthea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seelos Therapeutics and Opthea.
Diversification Opportunities for Seelos Therapeutics and Opthea
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seelos and Opthea is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Seelos Therapeutics and Opthea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opthea and Seelos 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 Seelos Therapeutics are associated (or correlated) with Opthea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opthea has no effect on the direction of Seelos Therapeutics i.e., Seelos Therapeutics and Opthea go up and down completely randomly.
Pair Corralation between Seelos Therapeutics and Opthea
Given the investment horizon of 90 days Seelos Therapeutics is expected to under-perform the Opthea. In addition to that, Seelos Therapeutics is 3.07 times more volatile than Opthea. It trades about -0.23 of its total potential returns per unit of risk. Opthea is currently generating about 0.04 per unit of volatility. If you would invest 297.00 in Opthea on August 25, 2024 and sell it today you would earn a total of 19.00 from holding Opthea or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.31% |
| Values | Daily Returns |
Seelos Therapeutics vs. Opthea
Performance |
| Timeline |
| Seelos Therapeutics |
| Opthea |
Seelos Therapeutics and Opthea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seelos Therapeutics and Opthea
The main advantage of trading using opposite Seelos Therapeutics and Opthea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seelos Therapeutics position performs unexpectedly, Opthea 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 Opthea will offset losses from the drop in Opthea's long position.| Seelos Therapeutics vs. ATAI Life Sciences | Seelos Therapeutics vs. Mind Medicine | Seelos Therapeutics vs. GH Research PLC | Seelos Therapeutics vs. Cybin Inc |
| Opthea vs. Molecular Partners AG | Opthea vs. MediciNova | Opthea vs. Anebulo Pharmaceuticals | Opthea vs. Champions Oncology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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