Correlation Between Sellas Life and 71647NBE8

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Can any of the company-specific risk be diversified away by investing in both Sellas Life and 71647NBE8 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 71647NBE8 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 US71647NBE85, you can compare the effects of market volatilities on Sellas Life and 71647NBE8 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 71647NBE8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and 71647NBE8.

Diversification Opportunities for Sellas Life and 71647NBE8

0.08
  Correlation Coefficient

Significant diversification

The 3 months correlation between Sellas and 71647NBE8 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and US71647NBE85 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US71647NBE85 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 71647NBE8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US71647NBE85 has no effect on the direction of Sellas Life i.e., Sellas Life and 71647NBE8 go up and down completely randomly.

Pair Corralation between Sellas Life and 71647NBE8

Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 7.78 times more return on investment than 71647NBE8. However, Sellas Life is 7.78 times more volatile than US71647NBE85. It trades about 0.22 of its potential returns per unit of risk. US71647NBE85 is currently generating about -0.12 per unit of risk. If you would invest  107.00  in Sellas Life Sciences on November 3, 2024 and sell it today you would earn a total of  55.00  from holding Sellas Life Sciences or generate 51.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sellas Life Sciences  vs.  US71647NBE85

 Performance 
       Timeline  
Sellas Life Sciences 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Sellas Life Sciences are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Sellas Life unveiled solid returns over the last few months and may actually be approaching a breakup point.
US71647NBE85 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days US71647NBE85 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 71647NBE8 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Sellas Life and 71647NBE8 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sellas Life and 71647NBE8

The main advantage of trading using opposite Sellas Life and 71647NBE8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sellas Life position performs unexpectedly, 71647NBE8 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 71647NBE8 will offset losses from the drop in 71647NBE8's long position.
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The idea behind Sellas Life Sciences and US71647NBE85 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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