Correlation Between Sellas Life and Minerva Neurosciences

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

Diversification Opportunities for Sellas Life and Minerva Neurosciences

-0.71

Correlation Coefficient

Sellas Life  Minerva Neurosciences

Pay attention - limited upside

The 3 months correlation between Sellas and Minerva is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sellas Life Sciences and Minerva Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva Neurosciences 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 Minerva Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva Neurosciences has no effect on the direction of Sellas Life i.e., Sellas Life and Minerva Neurosciences go up and down completely randomly.

Pair Corralation between Sellas Life and Minerva Neurosciences

Considering the 90-day investment horizon Sellas Life Sciences is expected to generate 0.78 times more return on investment than Minerva Neurosciences. However, Sellas Life Sciences is 1.28 times less risky than Minerva Neurosciences. It trades about 0.02 of its potential returns per unit of risk. Minerva Neurosciences is currently generating about 0.02 per unit of risk. If you would invest  186.00  in Sellas Life Sciences on June 29, 2024 and sell it today you would lose (61.90) from holding Sellas Life Sciences or give up 33.28% of portfolio value over 90 days.

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

Sellas Life Sciences  vs.  Minerva Neurosciences

Sellas Life Sciences

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sellas Life Sciences are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Sellas Life may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Minerva Neurosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minerva Neurosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Sellas Life and Minerva Neurosciences

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

The idea behind Sellas Life Sciences and Minerva Neurosciences 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.