Correlation Between Sellas Life and Awilco Drilling

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

Diversification Opportunities for Sellas Life and Awilco Drilling

0.05

Correlation Coefficient

Sellas Life  Awilco Drilling

Significant diversification

The 3 months correlation between Sellas and Awilco is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Awilco Drilling PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco Drilling PLC 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 Awilco Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco Drilling PLC has no effect on the direction of Sellas Life i.e., Sellas Life and Awilco Drilling go up and down completely randomly.

Pair Corralation between Sellas Life and Awilco Drilling

Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Awilco Drilling. In addition to that, Sellas Life is 9.98 times more volatile than Awilco Drilling PLC. It trades about -0.01 of its total potential returns per unit of risk. Awilco Drilling PLC is currently generating about -0.13 per unit of volatility. If you would invest  197.00  in Awilco Drilling PLC on September 4, 2024 and sell it today you would lose (5.00) from holding Awilco Drilling PLC or give up 2.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Sellas Life Sciences  vs.  Awilco Drilling PLC

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 comparatively stable essential indicators, Sellas Life is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Awilco Drilling PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Awilco Drilling PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Awilco Drilling is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sellas Life and Awilco Drilling

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

The idea behind Sellas Life Sciences and Awilco Drilling PLC 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 CEOs Directory module to screen CEOs from public companies around the world.