Correlation Between Serina Therapeutics and Sea

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

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

Diversification Opportunities for Serina Therapeutics and Sea

-0.67

Correlation Coefficient

Serina Therapeutics  Sea

Excellent diversification

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

Pair Corralation between Serina Therapeutics and Sea

Considering the 90-day investment horizon Serina Therapeutics is expected to under-perform the Sea. In addition to that, Serina Therapeutics is 3.36 times more volatile than Sea. It trades about -0.04 of its total potential returns per unit of risk. Sea is currently generating about 0.15 per unit of volatility. 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

Serina Therapeutics  vs.  Sea

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.

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.

Pair Trading with Serina Therapeutics and Sea

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

The idea behind Serina Therapeutics and Sea 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.