Correlation Between Acumen Pharmaceuticals and Elevation Oncology
Can any of the company-specific risk be diversified away by investing in both Acumen Pharmaceuticals and Elevation Oncology 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 Acumen Pharmaceuticals and Elevation Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acumen Pharmaceuticals and Elevation Oncology, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Elevation Oncology 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 Acumen Pharmaceuticals with a short position of Elevation Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Elevation Oncology.
Diversification Opportunities for Acumen Pharmaceuticals and Elevation Oncology
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acumen and Elevation is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and Acumen Pharmaceuticals 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 Acumen Pharmaceuticals are associated (or correlated) with Elevation Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Oncology has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Elevation Oncology go up and down completely randomly.
Pair Corralation between Acumen Pharmaceuticals and Elevation Oncology
Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Elevation Oncology. But the stock apears to be less risky and, when comparing its historical volatility, Acumen Pharmaceuticals is 1.6 times less risky than Elevation Oncology. The stock trades about -0.17 of its potential returns per unit of risk. The Elevation Oncology is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Elevation Oncology on November 9, 2024 and sell it today you would lose (8.00) from holding Elevation Oncology or give up 10.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acumen Pharmaceuticals vs. Elevation Oncology
Performance |
| Timeline |
| Acumen Pharmaceuticals |
| Elevation Oncology |
Acumen Pharmaceuticals and Elevation Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acumen Pharmaceuticals and Elevation Oncology
The main advantage of trading using opposite Acumen Pharmaceuticals and Elevation Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acumen Pharmaceuticals position performs unexpectedly, Elevation Oncology 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 Elevation Oncology will offset losses from the drop in Elevation Oncology's long position.| Acumen Pharmaceuticals vs. Terns Pharmaceuticals | Acumen Pharmaceuticals vs. X4 Pharmaceuticals | Acumen Pharmaceuticals vs. Day One Biopharmaceuticals | Acumen Pharmaceuticals vs. Hookipa Pharma |
| Elevation Oncology vs. Ocean Biomedical | Elevation Oncology vs. Zura Bio Limited | Elevation Oncology vs. Enveric Biosciences | Elevation Oncology vs. Hepion Pharmaceuticals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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