Correlation Between Eliem Therapeutics and Biocardia
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and Biocardia 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 Eliem Therapeutics and Biocardia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and Biocardia, you can compare the effects of market volatilities on Eliem Therapeutics and Biocardia 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 Eliem Therapeutics with a short position of Biocardia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and Biocardia.
Diversification Opportunities for Eliem Therapeutics and Biocardia
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eliem and Biocardia is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia and Eliem Therapeutics 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 Eliem Therapeutics are associated (or correlated) with Biocardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biocardia has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and Biocardia go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and Biocardia
Given the investment horizon of 90 days Eliem Therapeutics is expected to under-perform the Biocardia. But the stock apears to be less risky and, when comparing its historical volatility, Eliem Therapeutics is 1.06 times less risky than Biocardia. The stock trades about -0.21 of its potential returns per unit of risk. The Biocardia is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 239.00 in Biocardia on September 2, 2024 and sell it today you would lose (11.00) from holding Biocardia or give up 4.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Eliem Therapeutics vs. Biocardia
Performance |
| Timeline |
| Eliem Therapeutics |
| Biocardia |
Eliem Therapeutics and Biocardia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and Biocardia
The main advantage of trading using opposite Eliem Therapeutics and Biocardia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, Biocardia 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 Biocardia will offset losses from the drop in Biocardia's long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| Biocardia vs. Aerovate Therapeutics | Biocardia vs. Adagene | Biocardia vs. Acrivon Therapeutics, Common | Biocardia vs. Rezolute |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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