Correlation Between Eledon Pharmaceuticals and LianBio ADR
Can any of the company-specific risk be diversified away by investing in both Eledon Pharmaceuticals and LianBio ADR 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 LianBio ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eledon Pharmaceuticals and LianBio ADR, you can compare the effects of market volatilities on Eledon Pharmaceuticals and LianBio ADR 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 LianBio ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eledon Pharmaceuticals and LianBio ADR.
Diversification Opportunities for Eledon Pharmaceuticals and LianBio ADR
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eledon and LianBio is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eledon Pharmaceuticals and LianBio ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianBio ADR 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 LianBio ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianBio ADR has no effect on the direction of Eledon Pharmaceuticals i.e., Eledon Pharmaceuticals and LianBio ADR go up and down completely randomly.
Pair Corralation between Eledon Pharmaceuticals and LianBio ADR
If you would invest 337.00 in Eledon Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 64.00 from holding Eledon Pharmaceuticals or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Eledon Pharmaceuticals vs. LianBio ADR
Performance |
| Timeline |
| Eledon Pharmaceuticals |
| LianBio ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eledon Pharmaceuticals and LianBio ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eledon Pharmaceuticals and LianBio ADR
The main advantage of trading using opposite Eledon Pharmaceuticals and LianBio ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eledon Pharmaceuticals position performs unexpectedly, LianBio ADR 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 LianBio ADR will offset losses from the drop in LianBio ADR's long position.| Eledon Pharmaceuticals vs. Inozyme Pharma | Eledon Pharmaceuticals vs. Day One Biopharmaceuticals | Eledon Pharmaceuticals vs. Terns Pharmaceuticals | Eledon Pharmaceuticals vs. Hookipa Pharma |
| LianBio ADR vs. Sensei Biotherapeutics | LianBio ADR vs. NextCure | LianBio ADR vs. Nuvation Bio | LianBio ADR vs. Inozyme Pharma |
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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