Correlation Between Sellas Life and Kinetik Holdings

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

Diversification Opportunities for Sellas Life and Kinetik Holdings

-0.33

Correlation Coefficient

Sellas Life  Kinetik Holdings

Very good diversification

The 3 months correlation between Sellas and Kinetik is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings 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 Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of Sellas Life i.e., Sellas Life and Kinetik Holdings go up and down completely randomly.

Pair Corralation between Sellas Life and Kinetik Holdings

Considering the 90-day investment horizon Sellas Life Sciences is expected to under-perform the Kinetik Holdings. In addition to that, Sellas Life is 1.77 times more volatile than Kinetik Holdings. It trades about -0.12 of its total potential returns per unit of risk. Kinetik Holdings is currently generating about 0.17 per unit of volatility. If you would invest  4,510  in Kinetik Holdings on September 20, 2024 and sell it today you would earn a total of  1,107  from holding Kinetik Holdings or generate 24.55% return on investment over 90 days.

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

Sellas Life Sciences  vs.  Kinetik Holdings

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.

Kinetik Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinetik Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Kinetik Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sellas Life and Kinetik Holdings

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

The idea behind Sellas Life Sciences and Kinetik Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.