Correlation Between SeqLL and Sera Prognostics

Can any of the company-specific risk be diversified away by investing in both SeqLL and Sera Prognostics 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 SeqLL and Sera Prognostics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SeqLL Inc and Sera Prognostics, you can compare the effects of market volatilities on SeqLL and Sera Prognostics 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 SeqLL with a short position of Sera Prognostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeqLL and Sera Prognostics.

Diversification Opportunities for SeqLL and Sera Prognostics

-0.27

Correlation Coefficient

SeqLL  Sera Prognostics

Very good diversification

The 3 months correlation between SeqLL and Sera is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding SeqLL Inc and Sera Prognostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sera Prognostics and SeqLL 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 SeqLL Inc are associated (or correlated) with Sera Prognostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sera Prognostics has no effect on the direction of SeqLL i.e., SeqLL and Sera Prognostics go up and down completely randomly.

Pair Corralation between SeqLL and Sera Prognostics

If you would invest  712.00  in Sera Prognostics on August 31, 2024 and sell it today you would lose (50.00) from holding Sera Prognostics or give up 7.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

SeqLL Inc  vs.  Sera Prognostics

SeqLL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SeqLL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, SeqLL is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Sera Prognostics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sera Prognostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Sera Prognostics is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SeqLL and Sera Prognostics

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

The idea behind SeqLL Inc and Sera Prognostics 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.