Correlation Between Eliem Therapeutics and Biofrontera Warrants
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics 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 Eliem Therapeutics and Biofrontera Warrants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and Biofrontera Warrants, you can compare the effects of market volatilities on Eliem Therapeutics 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 Eliem Therapeutics with a short position of Biofrontera Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and Biofrontera Warrants.
Diversification Opportunities for Eliem Therapeutics and Biofrontera Warrants
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eliem and Biofrontera is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and Biofrontera Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera Warrants 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 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 Eliem Therapeutics i.e., Eliem Therapeutics and Biofrontera Warrants go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and Biofrontera Warrants
Given the investment horizon of 90 days Eliem Therapeutics is expected to under-perform the Biofrontera Warrants. But the stock apears to be less risky and, when comparing its historical volatility, Eliem Therapeutics is 7.13 times less risky than Biofrontera Warrants. The stock trades about -0.21 of its potential returns per unit of risk. The Biofrontera Warrants is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Biofrontera Warrants on September 1, 2024 and sell it today you would lose (6.00) from holding Biofrontera Warrants or give up 31.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eliem Therapeutics vs. Biofrontera Warrants
Performance |
| Timeline |
| Eliem Therapeutics |
| Biofrontera Warrants |
Eliem Therapeutics and Biofrontera Warrants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and Biofrontera Warrants
The main advantage of trading using opposite Eliem Therapeutics and Biofrontera Warrants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics 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.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| Biofrontera Warrants vs. Tff Pharmaceuticals | Biofrontera Warrants vs. Eliem Therapeutics | Biofrontera Warrants vs. Inhibrx | Biofrontera Warrants vs. Enliven Therapeutics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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