Correlation Between Biomea Fusion and Elevation Oncology
Can any of the company-specific risk be diversified away by investing in both Biomea Fusion 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 Biomea Fusion and Elevation Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biomea Fusion and Elevation Oncology, you can compare the effects of market volatilities on Biomea Fusion 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 Biomea Fusion with a short position of Elevation Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biomea Fusion and Elevation Oncology.
Diversification Opportunities for Biomea Fusion and Elevation Oncology
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Biomea and Elevation is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Biomea Fusion and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and Biomea Fusion 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 Biomea Fusion 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 Biomea Fusion i.e., Biomea Fusion and Elevation Oncology go up and down completely randomly.
Pair Corralation between Biomea Fusion and Elevation Oncology
Given the investment horizon of 90 days Biomea Fusion is expected to under-perform the Elevation Oncology. But the stock apears to be less risky and, when comparing its historical volatility, Biomea Fusion is 1.21 times less risky than Elevation Oncology. The stock trades about -0.61 of its potential returns per unit of risk. The Elevation Oncology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 58.00 in Elevation Oncology on August 26, 2024 and sell it today you would earn a total of 2.00 from holding Elevation Oncology or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biomea Fusion vs. Elevation Oncology
Performance |
| Timeline |
| Biomea Fusion |
| Elevation Oncology |
Biomea Fusion and Elevation Oncology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biomea Fusion and Elevation Oncology
The main advantage of trading using opposite Biomea Fusion and Elevation Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biomea Fusion 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.| Biomea Fusion vs. Edgewise Therapeutics | Biomea Fusion vs. Werewolf Therapeutics | Biomea Fusion vs. Cullinan Oncology LLC | Biomea Fusion vs. Design Therapeutics |
| 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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