Correlation Between Sellas Life and Cebu Air
Can any of the company-specific risk be diversified away by investing in both Sellas Life and Cebu Air 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 Sellas Life and Cebu Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sellas Life Sciences and Cebu Air ADR, you can compare the effects of market volatilities on Sellas Life and Cebu Air 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 Sellas Life with a short position of Cebu Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Cebu Air.
Diversification Opportunities for Sellas Life and Cebu Air
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sellas and Cebu is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Cebu Air ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cebu Air ADR and Sellas Life 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 Sellas Life Sciences are associated (or correlated) with Cebu Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cebu Air ADR has no effect on the direction of Sellas Life i.e., Sellas Life and Cebu Air go up and down completely randomly.
Pair Corralation between Sellas Life and Cebu Air
Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 1.07 times more return on investment than Cebu Air. However, Sellas Life is 1.07 times more volatile than Cebu Air ADR. It trades about -0.05 of its potential returns per unit of risk. Cebu Air ADR is currently generating about -0.22 per unit of risk. If you would invest 122.00 in Sellas Life Sciences on August 28, 2024 and sell it today you would lose (5.00) from holding Sellas Life Sciences or give up 4.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Cebu Air ADR
Performance |
| Timeline |
| Sellas Life Sciences |
| Cebu Air ADR |
Sellas Life and Cebu Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Cebu Air
The main advantage of trading using opposite Sellas Life and Cebu Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, Cebu Air 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 Cebu Air will offset losses from the drop in Cebu Air's long position.| Sellas Life vs. NLS Pharmaceutics AG | Sellas Life vs. Mereo BioPharma Group | Sellas Life vs. Day One Biopharmaceuticals | Sellas Life vs. Reviva Pharmaceuticals Holdings |
| Cebu Air vs. Sabra Healthcare REIT | Cebu Air vs. SEI Investments | Cebu Air vs. CVW CleanTech | Cebu Air vs. Xponential Fitness |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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