Correlation Between Summit Therapeutics and Sellas Life
Can any of the company-specific risk be diversified away by investing in both Summit Therapeutics and Sellas Life 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 Summit Therapeutics and Sellas Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Therapeutics PLC and Sellas Life Sciences, you can compare the effects of market volatilities on Summit Therapeutics and Sellas Life 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 Summit Therapeutics with a short position of Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Therapeutics and Sellas Life.
Diversification Opportunities for Summit Therapeutics and Sellas Life
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and Sellas is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Summit Therapeutics PLC and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences and Summit Therapeutics 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 Summit Therapeutics PLC are associated (or correlated) with Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of Summit Therapeutics i.e., Summit Therapeutics and Sellas Life go up and down completely randomly.
Pair Corralation between Summit Therapeutics and Sellas Life
Given the investment horizon of 90 days Summit Therapeutics is expected to generate 2.75 times less return on investment than Sellas Life. But when comparing it to its historical volatility, Summit Therapeutics PLC is 2.01 times less risky than Sellas Life. It trades about 0.14 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Sellas Life Sciences on November 5, 2024 and sell it today you would earn a total of 42.00 from holding Sellas Life Sciences or generate 39.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Therapeutics PLC vs. Sellas Life Sciences
Performance |
| Timeline |
| Summit Therapeutics PLC |
| Sellas Life Sciences |
Summit Therapeutics and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Therapeutics and Sellas Life
The main advantage of trading using opposite Summit Therapeutics and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Therapeutics position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.| Summit Therapeutics vs. Nkarta Inc | Summit Therapeutics vs. Cullinan Oncology LLC | Summit Therapeutics vs. Kezar Life Sciences | Summit Therapeutics vs. Kronos Bio |
| 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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