Correlation Between Sellas Life and Viemed Healthcare

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

Diversification Opportunities for Sellas Life and Viemed Healthcare

0.43

Correlation Coefficient

Sellas Life  Viemed Healthcare

Very weak diversification

The 3 months correlation between Sellas and Viemed is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Sellas Life i.e., Sellas Life and Viemed Healthcare go up and down completely randomly.

Pair Corralation between Sellas Life and Viemed Healthcare

Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Viemed Healthcare. In addition to that, Sellas Life is 1.53 times more volatile than Viemed Healthcare. It trades about 0.0 of its total potential returns per unit of risk. Viemed Healthcare is currently generating about 0.1 per unit of volatility. If you would invest  630.00  in Viemed Healthcare on October 7, 2024 and sell it today you would earn a total of  182.00  from holding Viemed Healthcare or generate 28.89% return on investment over 90 days.

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

Sellas Life Sciences  vs.  Viemed Healthcare

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 latest weak performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Viemed Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viemed Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Viemed Healthcare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sellas Life and Viemed Healthcare

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

The idea behind Sellas Life Sciences and Viemed Healthcare 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..