Correlation Between Scopus Biopharma and Seres Therapeutics

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

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

Diversification Opportunities for Scopus Biopharma and Seres Therapeutics

0.0

Correlation Coefficient

Scopus Biopharma  Seres Therapeutics

Pay attention - limited upside

The 3 months correlation between Scopus and Seres is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scopus Biopharma and Seres Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seres Therapeutics and Scopus Biopharma 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 Scopus Biopharma are associated (or correlated) with Seres Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seres Therapeutics has no effect on the direction of Scopus Biopharma i.e., Scopus Biopharma and Seres Therapeutics go up and down completely randomly.

Pair Corralation between Scopus Biopharma and Seres Therapeutics

If you would invest  10.00  in Scopus Biopharma on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Scopus Biopharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Scopus Biopharma  vs.  Seres Therapeutics

Scopus Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Scopus Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Scopus Biopharma is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Seres Therapeutics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seres Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Seres Therapeutics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scopus Biopharma and Seres Therapeutics

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

The idea behind Scopus Biopharma and Seres 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.