Correlation Between SIGA Technologies and Galecto

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

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

Diversification Opportunities for SIGA Technologies and Galecto

0.66

Correlation Coefficient

SIGA Technologies  Galecto

Poor diversification

The 3 months correlation between SIGA and Galecto is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies and Galecto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galecto and SIGA Technologies 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 SIGA Technologies are associated (or correlated) with Galecto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galecto has no effect on the direction of SIGA Technologies i.e., SIGA Technologies and Galecto go up and down completely randomly.

Pair Corralation between SIGA Technologies and Galecto

Given the investment horizon of 90 days SIGA Technologies is expected to generate 0.28 times more return on investment than Galecto. However, SIGA Technologies is 3.54 times less risky than Galecto. It trades about -0.03 of its potential returns per unit of risk. Galecto is currently generating about -0.01 per unit of risk. If you would invest  592.00  in SIGA Technologies on December 28, 2024 and sell it today you would lose (35.00) from holding SIGA Technologies or give up 5.91% of portfolio value over 90 days.

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

SIGA Technologies  vs.  Galecto

SIGA Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days SIGA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, SIGA Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Galecto

Risk-Adjusted Performance

Very Weak

Over the last 90 days Galecto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with SIGA Technologies and Galecto

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

The idea behind SIGA Technologies and Galecto 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..