Correlation Between Sea and Serina Therapeutics

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

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

Diversification Opportunities for Sea and Serina Therapeutics

-0.67

Correlation Coefficient

Sea  Serina Therapeutics

Excellent diversification

The 3 months correlation between Sea and Serina is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics and Sea 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 Sea are associated (or correlated) with Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Sea i.e., Sea and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Sea and Serina Therapeutics

Allowing for the 90-day total investment horizon Sea is expected to generate 0.3 times more return on investment than Serina Therapeutics. However, Sea is 3.36 times less risky than Serina Therapeutics. It trades about 0.15 of its potential returns per unit of risk. Serina Therapeutics is currently generating about -0.04 per unit of risk. If you would invest  9,067  in Sea on September 22, 2024 and sell it today you would earn a total of  1,997  from holding Sea or generate 22.02% return on investment over 90 days.

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

Sea  vs.  Serina Therapeutics

Sea

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sea are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sea exhibited solid returns over the last few months and may actually be approaching a breakup point.

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Sea and Serina Therapeutics

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

The idea behind Sea and Serina Therapeutics 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.