Correlation Between Sellas Life and Abcellera Biologics

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

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

Diversification Opportunities for Sellas Life and Abcellera Biologics

0.15

Correlation Coefficient

Sellas Life  Abcellera Biologics

Average diversification

The 3 months correlation between Sellas and Abcellera is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Abcellera Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abcellera Biologics and Sellas Life 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 Sellas Life Sciences are associated (or correlated) with Abcellera Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abcellera Biologics has no effect on the direction of Sellas Life i.e., Sellas Life and Abcellera Biologics go up and down completely randomly.

Pair Corralation between Sellas Life and Abcellera Biologics

Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 1.63 times more return on investment than Abcellera Biologics. However, Sellas Life is 1.63 times more volatile than Abcellera Biologics. It trades about 0.07 of its potential returns per unit of risk. Abcellera Biologics is currently generating about -0.04 per unit of risk. If you would invest  99.00  in Sellas Life Sciences on December 29, 2024 and sell it today you would earn a total of  17.00  from holding Sellas Life Sciences or generate 17.17% return on investment over 90 days.

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

Sellas Life Sciences  vs.  Abcellera Biologics

Sellas Life Sciences

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sellas Life Sciences are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Sellas Life unveiled solid returns over the last few months and may actually be approaching a breakup point.

Abcellera Biologics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Abcellera Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Sellas Life and Abcellera Biologics

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

The idea behind Sellas Life Sciences and Abcellera Biologics 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.