Correlation Between Serina Therapeutics and Equillium

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

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

Diversification Opportunities for Serina Therapeutics and Equillium

0.72

Correlation Coefficient

Serina Therapeutics  Equillium

Poor diversification

The 3 months correlation between Serina and Equillium is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Serina Therapeutics and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium and Serina 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 Serina Therapeutics are associated (or correlated) with Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Serina Therapeutics i.e., Serina Therapeutics and Equillium go up and down completely randomly.

Pair Corralation between Serina Therapeutics and Equillium

Considering the 90-day investment horizon Serina Therapeutics is expected to generate 1.77 times more return on investment than Equillium. However, Serina Therapeutics is 1.77 times more volatile than Equillium. It trades about 0.04 of its potential returns per unit of risk. Equillium is currently generating about 0.04 per unit of risk. If you would invest  530.00  in Serina Therapeutics on October 7, 2024 and sell it today you would lose (12.00) from holding Serina Therapeutics or give up 2.26% of portfolio value over 90 days.

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

Serina Therapeutics  vs.  Equillium

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Equillium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Equillium has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Equillium is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Serina Therapeutics and Equillium

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

The idea behind Serina Therapeutics and Equillium 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.