Correlation Between Sellas Life and Digi International
Can any of the company-specific risk be diversified away by investing in both Sellas Life and Digi International 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 Digi International 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 Digi International, you can compare the effects of market volatilities on Sellas Life and Digi International 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 Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Digi International.
Diversification Opportunities for Sellas Life and Digi International
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sellas and Digi is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Sellas Life i.e., Sellas Life and Digi International go up and down completely randomly.
Pair Corralation between Sellas Life and Digi International
Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Digi International. In addition to that, Sellas Life is 1.48 times more volatile than Digi International. It trades about -0.04 of its total potential returns per unit of risk. Digi International is currently generating about 0.13 per unit of volatility. If you would invest 2,827 in Digi International on September 3, 2024 and sell it today you would earn a total of 495.00 from holding Digi International or generate 17.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Digi International
Performance |
| Timeline |
| Sellas Life Sciences |
| Digi International |
Sellas Life and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Digi International
The main advantage of trading using opposite Sellas Life and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International'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 |
| Digi International vs. Highway Holdings Limited | Digi International vs. QCR Holdings | Digi International vs. Partner Communications | Digi International vs. Acumen Pharmaceuticals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |