Correlation Between Sellas Life and Galectin Therapeutics

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

Diversification Opportunities for Sellas Life and Galectin Therapeutics

0.79

Correlation Coefficient

Sellas Life  Galectin Therapeutics

Poor diversification

The 3 months correlation between Sellas and Galectin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Galectin Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galectin Therapeutics 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 Galectin Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galectin Therapeutics has no effect on the direction of Sellas Life i.e., Sellas Life and Galectin Therapeutics go up and down completely randomly.

Pair Corralation between Sellas Life and Galectin Therapeutics

Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 0.41 times more return on investment than Galectin Therapeutics. However, Sellas Life Sciences is 2.46 times less risky than Galectin Therapeutics. It trades about -0.31 of its potential returns per unit of risk. Galectin Therapeutics is currently generating about -0.32 per unit of risk. If you would invest  124.00  in Sellas Life Sciences on September 21, 2024 and sell it today you would lose (35.00) from holding Sellas Life Sciences or give up 28.23% of portfolio value over 90 days.

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

Sellas Life Sciences  vs.  Galectin Therapeutics

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 weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Galectin Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galectin Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sellas Life and Galectin Therapeutics

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

The idea behind Sellas Life Sciences and Galectin 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.