Correlation Between Sellas Life and Legato Merger
Can any of the company-specific risk be diversified away by investing in both Sellas Life and Legato Merger 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 Legato Merger 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 Legato Merger II, you can compare the effects of market volatilities on Sellas Life and Legato Merger 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 Legato Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Legato Merger.
Diversification Opportunities for Sellas Life and Legato Merger
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sellas and Legato is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Legato Merger II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legato Merger II 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 Legato Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legato Merger II has no effect on the direction of Sellas Life i.e., Sellas Life and Legato Merger go up and down completely randomly.
Pair Corralation between Sellas Life and Legato Merger
Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 1.36 times more return on investment than Legato Merger. However, Sellas Life is 1.36 times more volatile than Legato Merger II. It trades about 0.01 of its potential returns per unit of risk. Legato Merger II is currently generating about -0.03 per unit of risk. If you would invest 252.00 in Sellas Life Sciences on August 30, 2024 and sell it today you would lose (132.00) from holding Sellas Life Sciences or give up 52.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Legato Merger II
Performance |
| Timeline |
| Sellas Life Sciences |
| Legato Merger II |
Sellas Life and Legato Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Legato Merger
The main advantage of trading using opposite Sellas Life and Legato Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, Legato Merger 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 Legato Merger will offset losses from the drop in Legato Merger'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 |
| Legato Merger vs. LB Foster | Legato Merger vs. Pearson PLC ADR | Legato Merger vs. Udemy Inc | Legato Merger vs. Scholastic |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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