Correlation Between Elutia and Eliem Therapeutics
Can any of the company-specific risk be diversified away by investing in both Elutia and Eliem Therapeutics 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 Elutia and Eliem Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elutia Inc and Eliem Therapeutics, you can compare the effects of market volatilities on Elutia and Eliem Therapeutics 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 Elutia with a short position of Eliem Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elutia and Eliem Therapeutics.
Diversification Opportunities for Elutia and Eliem Therapeutics
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elutia and Eliem is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Elutia Inc and Eliem Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eliem Therapeutics and Elutia 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 Elutia Inc are associated (or correlated) with Eliem Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eliem Therapeutics has no effect on the direction of Elutia i.e., Elutia and Eliem Therapeutics go up and down completely randomly.
Pair Corralation between Elutia and Eliem Therapeutics
Given the investment horizon of 90 days Elutia Inc is expected to generate 0.86 times more return on investment than Eliem Therapeutics. However, Elutia Inc is 1.16 times less risky than Eliem Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Eliem Therapeutics is currently generating about 0.03 per unit of risk. If you would invest 237.00 in Elutia Inc on August 31, 2024 and sell it today you would earn a total of 177.00 from holding Elutia Inc or generate 74.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Elutia Inc vs. Eliem Therapeutics
Performance |
| Timeline |
| Elutia Inc |
| Eliem Therapeutics |
Elutia and Eliem Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elutia and Eliem Therapeutics
The main advantage of trading using opposite Elutia and Eliem Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elutia position performs unexpectedly, Eliem Therapeutics 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 Eliem Therapeutics will offset losses from the drop in Eliem Therapeutics' long position.The idea behind Elutia Inc and Eliem Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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