Correlation Between Sellas Life and Securitas

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

Diversification Opportunities for Sellas Life and Securitas

-0.72

Correlation Coefficient

Sellas Life  Securitas

Pay attention - limited upside

The 3 months correlation between Sellas and Securitas is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Securitas AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Securitas AB 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 Securitas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Securitas AB has no effect on the direction of Sellas Life i.e., Sellas Life and Securitas go up and down completely randomly.

Pair Corralation between Sellas Life and Securitas

Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Securitas. In addition to that, Sellas Life is 2.38 times more volatile than Securitas AB. It trades about -0.02 of its total potential returns per unit of risk. Securitas AB is currently generating about 0.14 per unit of volatility. If you would invest  1,050  in Securitas AB on September 29, 2024 and sell it today you would earn a total of  235.00  from holding Securitas AB or generate 22.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	77.78%
Values	Daily Returns

Sellas Life Sciences  vs.  Securitas AB

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 unsteady 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.

Securitas AB

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Securitas AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile fundamental drivers, Securitas reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sellas Life and Securitas

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

The idea behind Sellas Life Sciences and Securitas AB 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.