Correlation Between Cyclacel Pharmaceuticals and Sienna Senior

Can any of the company-specific risk be diversified away by investing in both Cyclacel Pharmaceuticals and Sienna Senior 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 Cyclacel Pharmaceuticals and Sienna Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cyclacel Pharmaceuticals and Sienna Senior Living, you can compare the effects of market volatilities on Cyclacel Pharmaceuticals and Sienna Senior 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 Cyclacel Pharmaceuticals with a short position of Sienna Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cyclacel Pharmaceuticals and Sienna Senior.

Diversification Opportunities for Cyclacel Pharmaceuticals and Sienna Senior

0.5

Correlation Coefficient

Cyclacel Pharmaceuticals  Sienna Senior

Very weak diversification

The 3 months correlation between Cyclacel and Sienna is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cyclacel Pharmaceuticals and Sienna Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Senior Living and Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals are associated (or correlated) with Sienna Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Senior Living has no effect on the direction of Cyclacel Pharmaceuticals i.e., Cyclacel Pharmaceuticals and Sienna Senior go up and down completely randomly.

Pair Corralation between Cyclacel Pharmaceuticals and Sienna Senior

Given the investment horizon of 90 days Cyclacel Pharmaceuticals is expected to generate 7.55 times more return on investment than Sienna Senior. However, Cyclacel Pharmaceuticals is 7.55 times more volatile than Sienna Senior Living. It trades about 0.15 of its potential returns per unit of risk. Sienna Senior Living is currently generating about -0.53 per unit of risk. If you would invest  39.00  in Cyclacel Pharmaceuticals on October 8, 2024 and sell it today you would earn a total of  7.00  from holding Cyclacel Pharmaceuticals or generate 17.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Cyclacel Pharmaceuticals  vs.  Sienna Senior Living

Cyclacel Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cyclacel Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Sienna Senior Living

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sienna Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Cyclacel Pharmaceuticals and Sienna Senior

The main advantage of trading using opposite Cyclacel Pharmaceuticals and Sienna Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cyclacel Pharmaceuticals position performs unexpectedly, Sienna Senior 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 Sienna Senior will offset losses from the drop in Sienna Senior's long position.

The idea behind Cyclacel Pharmaceuticals and Sienna Senior Living 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.