Correlation Between Field Trip and Seelos Therapeutics

Can any of the company-specific risk be diversified away by investing in both Field Trip and Seelos Therapeutics 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 Field Trip and Seelos Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Field Trip Health and Seelos Therapeutics, you can compare the effects of market volatilities on Field Trip and Seelos Therapeutics 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 Field Trip with a short position of Seelos Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Field Trip and Seelos Therapeutics.

Diversification Opportunities for Field Trip and Seelos Therapeutics

0.37

Correlation Coefficient

Field Trip  Seelos Therapeutics

Weak diversification

The 3 months correlation between Field and Seelos is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Field Trip Health and Seelos Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seelos Therapeutics and Field Trip 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 Field Trip Health are associated (or correlated) with Seelos Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seelos Therapeutics has no effect on the direction of Field Trip i.e., Field Trip and Seelos Therapeutics go up and down completely randomly.

Pair Corralation between Field Trip and Seelos Therapeutics

If you would invest  4.12  in Field Trip Health on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Field Trip Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	2.38%
Values	Daily Returns

Field Trip Health  vs.  Seelos Therapeutics

Field Trip Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Field Trip Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Field Trip is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Seelos Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seelos Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Field Trip and Seelos Therapeutics

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

The idea behind Field Trip Health and Seelos Therapeutics 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.