Correlation Between Sellas Life and Day One

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

Diversification Opportunities for Sellas Life and Day One

0.25

Correlation Coefficient

Sellas Life  Day One

Modest diversification

The 3 months correlation between Sellas and Day is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Day One Biopharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day One Biopharmaceu 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 Day One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day One Biopharmaceu has no effect on the direction of Sellas Life i.e., Sellas Life and Day One go up and down completely randomly.

Pair Corralation between Sellas Life and Day One

Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Day One. In addition to that, Sellas Life is 1.61 times more volatile than Day One Biopharmaceuticals. It trades about -0.15 of its total potential returns per unit of risk. Day One Biopharmaceuticals is currently generating about -0.05 per unit of volatility. If you would invest  1,413  in Day One Biopharmaceuticals on September 13, 2024 and sell it today you would lose (132.00) from holding Day One Biopharmaceuticals or give up 9.34% of portfolio value over 90 days.

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

Sellas Life Sciences  vs.  Day One Biopharmaceuticals

Sellas Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sellas Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Day One Biopharmaceu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Day One Biopharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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 Sellas Life and Day One

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

The idea behind Sellas Life Sciences and Day One Biopharmaceuticals 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.