Correlation Between Silence Therapeutics and Seres Therapeutics
Can any of the company-specific risk be diversified away by investing in both Silence Therapeutics and Seres Therapeutics 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 Silence Therapeutics and Seres Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silence Therapeutics PLC and Seres Therapeutics, you can compare the effects of market volatilities on Silence Therapeutics and Seres Therapeutics 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 Silence Therapeutics with a short position of Seres Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silence Therapeutics and Seres Therapeutics.
Diversification Opportunities for Silence Therapeutics and Seres Therapeutics
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Silence and Seres is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Silence Therapeutics PLC and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres Therapeutics and Silence 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 Silence Therapeutics PLC are associated (or correlated) with Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of Silence Therapeutics i.e., Silence Therapeutics and Seres Therapeutics go up and down completely randomly.
Pair Corralation between Silence Therapeutics and Seres Therapeutics
Considering the 90-day investment horizon Silence Therapeutics PLC is expected to generate 0.73 times more return on investment than Seres Therapeutics. However, Silence Therapeutics PLC is 1.36 times less risky than Seres Therapeutics. It trades about 0.0 of its potential returns per unit of risk. Seres Therapeutics is currently generating about -0.02 per unit of risk. If you would invest 1,460 in Silence Therapeutics PLC on September 3, 2024 and sell it today you would lose (668.00) from holding Silence Therapeutics PLC or give up 45.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silence Therapeutics PLC vs. Seres Therapeutics
Performance |
| Timeline |
| Silence Therapeutics PLC |
| Seres Therapeutics |
Silence Therapeutics and Seres Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silence Therapeutics and Seres Therapeutics
The main advantage of trading using opposite Silence Therapeutics and Seres Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silence Therapeutics position performs unexpectedly, Seres Therapeutics 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 Seres Therapeutics will offset losses from the drop in Seres Therapeutics' long position.| Silence Therapeutics vs. DiaMedica Therapeutics | Silence Therapeutics vs. Lyra Therapeutics | Silence Therapeutics vs. Centessa Pharmaceuticals PLC |
| Seres Therapeutics vs. DiaMedica Therapeutics | Seres Therapeutics vs. Lyra Therapeutics | Seres Therapeutics vs. Centessa Pharmaceuticals PLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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