Correlation Between Sellas Life and Bridgetown Holdings

Can any of the company-specific risk be diversified away by investing in both Sellas Life and Bridgetown Holdings 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 Bridgetown Holdings 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 Bridgetown Holdings, you can compare the effects of market volatilities on Sellas Life and Bridgetown Holdings 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 Bridgetown Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sellas Life and Bridgetown Holdings.

Diversification Opportunities for Sellas Life and Bridgetown Holdings

0.0

Correlation Coefficient

Sellas Life  Bridgetown Holdings

Pay attention - limited upside

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

Pair Corralation between Sellas Life and Bridgetown Holdings

If you would invest  99.00  in Sellas Life Sciences on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Sellas Life Sciences or generate 12.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sellas Life Sciences  vs.  Bridgetown Holdings

Sellas Life Sciences

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sellas Life Sciences are ranked lower than 4 (%) 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.

Bridgetown Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sellas Life and Bridgetown Holdings

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

The idea behind Sellas Life Sciences and Bridgetown Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..