Correlation Between Sellas Life and Puma Biotechnology
Can any of the company-specific risk be diversified away by investing in both Sellas Life and Puma Biotechnology 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 Puma Biotechnology 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 Puma Biotechnology, you can compare the effects of market volatilities on Sellas Life and Puma Biotechnology 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 Puma Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Puma Biotechnology.
Diversification Opportunities for Sellas Life and Puma Biotechnology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sellas and Puma is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Puma Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puma Biotechnology 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 Puma Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puma Biotechnology has no effect on the direction of Sellas Life i.e., Sellas Life and Puma Biotechnology go up and down completely randomly.
Pair Corralation between Sellas Life and Puma Biotechnology
Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Puma Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Sellas Life Sciences is 1.53 times less risky than Puma Biotechnology. The stock trades about -0.44 of its potential returns per unit of risk. The Puma Biotechnology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 297.00 in Puma Biotechnology on September 14, 2024 and sell it today you would lose (5.00) from holding Puma Biotechnology or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sellas Life Sciences vs. Puma Biotechnology
Performance |
| Timeline |
| Sellas Life Sciences |
| Puma Biotechnology |
Sellas Life and Puma Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Puma Biotechnology
The main advantage of trading using opposite Sellas Life and Puma Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, Puma Biotechnology 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 Puma Biotechnology will offset losses from the drop in Puma Biotechnology's long position.| Sellas Life vs. Puma Biotechnology | Sellas Life vs. Iovance Biotherapeutics | Sellas Life vs. Day One Biopharmaceuticals | Sellas Life vs. Inozyme Pharma |
| Puma Biotechnology vs. Ultragenyx | Puma Biotechnology vs. Crinetics Pharmaceuticals | Puma Biotechnology vs. Arvinas | Puma Biotechnology vs. Revolution Medicines |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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