Correlation Between Sellas Life and Public Service
Can any of the company-specific risk be diversified away by investing in both Sellas Life and Public Service 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 Public Service 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 Public Service, you can compare the effects of market volatilities on Sellas Life and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Public Service.
Diversification Opportunities for Sellas Life and Public Service
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sellas and Public is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Public Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service has no effect on the direction of Sellas Life i.e., Sellas Life and Public Service go up and down completely randomly.
Pair Corralation between Sellas Life and Public Service
Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 5.46 times more return on investment than Public Service. However, Sellas Life is 5.46 times more volatile than Public Service. It trades about 0.08 of its potential returns per unit of risk. Public Service is currently generating about -0.14 per unit of risk. If you would invest 90.00 in Sellas Life Sciences on October 12, 2024 and sell it today you would earn a total of 5.00 from holding Sellas Life Sciences or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sellas Life Sciences vs. Public Service
Performance |
| Timeline |
| Sellas Life Sciences |
| Public Service |
Sellas Life and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sellas Life and Public Service
The main advantage of trading using opposite Sellas Life and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service'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 |
| Public Service vs. United Parks Resorts | Public Service vs. Sellas Life Sciences | Public Service vs. Ardelyx | Public Service vs. Catalyst 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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