Correlation Between Chimerix and Eledon Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Chimerix and Eledon Pharmaceuticals 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 Chimerix and Eledon Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chimerix and Eledon Pharmaceuticals, you can compare the effects of market volatilities on Chimerix and Eledon Pharmaceuticals 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 Chimerix with a short position of Eledon Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chimerix and Eledon Pharmaceuticals.
Diversification Opportunities for Chimerix and Eledon Pharmaceuticals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chimerix and Eledon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chimerix and Eledon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eledon Pharmaceuticals and Chimerix 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 Chimerix are associated (or correlated) with Eledon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eledon Pharmaceuticals has no effect on the direction of Chimerix i.e., Chimerix and Eledon Pharmaceuticals go up and down completely randomly.
Pair Corralation between Chimerix and Eledon Pharmaceuticals
Given the investment horizon of 90 days Chimerix is expected to under-perform the Eledon Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Chimerix is 1.33 times less risky than Eledon Pharmaceuticals. The stock trades about -0.01 of its potential returns per unit of risk. The Eledon Pharmaceuticals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 244.00 in Eledon Pharmaceuticals on September 3, 2024 and sell it today you would earn a total of 222.00 from holding Eledon Pharmaceuticals or generate 90.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chimerix vs. Eledon Pharmaceuticals
Performance |
| Timeline |
| Chimerix |
| Eledon Pharmaceuticals |
Chimerix and Eledon Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chimerix and Eledon Pharmaceuticals
The main advantage of trading using opposite Chimerix and Eledon Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chimerix position performs unexpectedly, Eledon Pharmaceuticals 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 Eledon Pharmaceuticals will offset losses from the drop in Eledon Pharmaceuticals' long position.| Chimerix vs. Assembly Biosciences | Chimerix vs. Spero Therapeutics | Chimerix vs. Achilles Therapeutics PLC | Chimerix vs. Instil Bio |
| Eledon Pharmaceuticals vs. DiaMedica Therapeutics | Eledon Pharmaceuticals vs. Lyra Therapeutics | Eledon Pharmaceuticals vs. Centessa Pharmaceuticals PLC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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