Correlation Between Eledon Pharmaceuticals and Biofrontera Warrants
Can any of the company-specific risk be diversified away by investing in both Eledon Pharmaceuticals and Biofrontera Warrants 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 Eledon Pharmaceuticals and Biofrontera Warrants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eledon Pharmaceuticals and Biofrontera Warrants, you can compare the effects of market volatilities on Eledon Pharmaceuticals and Biofrontera Warrants 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 Eledon Pharmaceuticals with a short position of Biofrontera Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eledon Pharmaceuticals and Biofrontera Warrants.
Diversification Opportunities for Eledon Pharmaceuticals and Biofrontera Warrants
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eledon and Biofrontera is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eledon Pharmaceuticals and Biofrontera Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera Warrants and Eledon 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 Eledon Pharmaceuticals are associated (or correlated) with Biofrontera Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera Warrants has no effect on the direction of Eledon Pharmaceuticals i.e., Eledon Pharmaceuticals and Biofrontera Warrants go up and down completely randomly.
Pair Corralation between Eledon Pharmaceuticals and Biofrontera Warrants
Given the investment horizon of 90 days Eledon Pharmaceuticals is expected to generate 49.97 times less return on investment than Biofrontera Warrants. But when comparing it to its historical volatility, Eledon Pharmaceuticals is 34.76 times less risky than Biofrontera Warrants. It trades about 0.13 of its potential returns per unit of risk. Biofrontera Warrants is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2.21 in Biofrontera Warrants on September 3, 2024 and sell it today you would earn a total of 10.79 from holding Biofrontera Warrants or generate 488.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 62.75% |
| Values | Daily Returns |
Eledon Pharmaceuticals vs. Biofrontera Warrants
Performance |
| Timeline |
| Eledon Pharmaceuticals |
| Biofrontera Warrants |
Eledon Pharmaceuticals and Biofrontera Warrants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eledon Pharmaceuticals and Biofrontera Warrants
The main advantage of trading using opposite Eledon Pharmaceuticals and Biofrontera Warrants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eledon Pharmaceuticals position performs unexpectedly, Biofrontera Warrants 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 Biofrontera Warrants will offset losses from the drop in Biofrontera Warrants' long position.| Eledon Pharmaceuticals vs. DiaMedica Therapeutics | Eledon Pharmaceuticals vs. Lyra Therapeutics | Eledon Pharmaceuticals vs. Centessa Pharmaceuticals PLC |
| Biofrontera Warrants vs. Connect Biopharma Holdings | Biofrontera Warrants vs. Acumen Pharmaceuticals | Biofrontera Warrants vs. Nuvation Bio | Biofrontera Warrants vs. Eledon 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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