Correlation Between Seelos Therapeutics and Vaccinex

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

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

Diversification Opportunities for Seelos Therapeutics and Vaccinex

0.22

Correlation Coefficient

Seelos Therapeutics  Vaccinex

Modest diversification

The 3 months correlation between Seelos and Vaccinex is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Seelos Therapeutics and Vaccinex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaccinex and Seelos 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 Seelos Therapeutics are associated (or correlated) with Vaccinex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaccinex has no effect on the direction of Seelos Therapeutics i.e., Seelos Therapeutics and Vaccinex go up and down completely randomly.

Pair Corralation between Seelos Therapeutics and Vaccinex

Given the investment horizon of 90 days Seelos Therapeutics is expected to under-perform the Vaccinex. In addition to that, Seelos Therapeutics is 1.62 times more volatile than Vaccinex. It trades about -0.21 of its total potential returns per unit of risk. Vaccinex is currently generating about -0.01 per unit of volatility. If you would invest  561.00  in Vaccinex on September 13, 2024 and sell it today you would lose (160.00) from holding Vaccinex or give up 28.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	75.0%
Values	Daily Returns

Seelos Therapeutics  vs.  Vaccinex

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.

Vaccinex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vaccinex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Vaccinex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Seelos Therapeutics and Vaccinex

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

The idea behind Seelos Therapeutics and Vaccinex 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.