Correlation Between OCUP Old and Sellas Life

Can any of the company-specific risk be diversified away by investing in both OCUP Old 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 OCUP Old and Sellas Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OCUP Old and Sellas Life Sciences, you can compare the effects of market volatilities on OCUP Old 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 OCUP Old with a short position of Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of OCUP Old and Sellas Life.

Diversification Opportunities for OCUP Old and Sellas Life

0.36

Correlation Coefficient

OCUP Old  Sellas Life

Weak diversification

The 3 months correlation between OCUP and Sellas is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding OCUP Old 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 OCUP Old 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 OCUP Old 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 OCUP Old i.e., OCUP Old and Sellas Life go up and down completely randomly.

Pair Corralation between OCUP Old and Sellas Life

Given the investment horizon of 90 days OCUP Old is expected to under-perform the Sellas Life. But the stock apears to be less risky and, when comparing its historical volatility, OCUP Old is 1.09 times less risky than Sellas Life. The stock trades about -0.23 of its potential returns per unit of risk. The Sellas Life Sciences is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  122.00  in Sellas Life Sciences on October 8, 2024 and sell it today you would lose (14.00) from holding Sellas Life Sciences or give up 11.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	22.58%
Values	Daily Returns

OCUP Old  vs.  Sellas Life Sciences

OCUP Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OCUP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Sellas Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sellas Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with OCUP Old and Sellas Life

The main advantage of trading using opposite OCUP Old and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OCUP Old 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.

The idea behind OCUP Old and Sellas Life Sciences 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.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.