Correlation Between Sellas Life and Eastern
Can any of the company-specific risk be diversified away by investing in both Sellas Life and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Sellas Life and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Eastern.
Diversification Opportunities for Sellas Life and Eastern
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sellas and Eastern is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Sellas Life i.e., Sellas Life and Eastern go up and down completely randomly.
Pair Corralation between Sellas Life and Eastern
Considering the 90-day investment horizon Sellas Life is expected to generate 3.24 times less return on investment than Eastern. In addition to that, Sellas Life is 1.97 times more volatile than Eastern Co. It trades about 0.01 of its total potential returns per unit of risk. Eastern Co is currently generating about 0.04 per unit of volatility. If you would invest 2,076 in Eastern Co on September 2, 2024 and sell it today you would earn a total of 796.00 from holding Eastern Co or generate 38.34% 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. Eastern Co
Performance |
| Timeline |
| Sellas Life Sciences |
| Eastern |
Sellas Life and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Eastern
The main advantage of trading using opposite Sellas Life and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern'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 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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