Correlation Between Sellas Life and Kandi Technologies

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

Diversification Opportunities for Sellas Life and Kandi Technologies

0.74

Correlation Coefficient

Sellas Life  Kandi Technologies

Poor diversification

The 3 months correlation between Sellas and Kandi is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies 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 Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Sellas Life i.e., Sellas Life and Kandi Technologies go up and down completely randomly.

Pair Corralation between Sellas Life and Kandi Technologies

Considering the 90-day investment horizon Sellas Life is expected to generate 1.33 times less return on investment than Kandi Technologies. But when comparing it to its historical volatility, Sellas Life Sciences is 1.82 times less risky than Kandi Technologies. It trades about 0.22 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Kandi Technologies Group on October 20, 2024 and sell it today you would earn a total of  20.00  from holding Kandi Technologies Group or generate 21.05% return on investment over 90 days.

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

Sellas Life Sciences  vs.  Kandi Technologies Group

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 comparatively stable essential indicators, Sellas Life is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Sellas Life and Kandi Technologies

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

The idea behind Sellas Life Sciences and Kandi Technologies Group 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.