Correlation Between Eliem Therapeutics and LENZ Therapeutics
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and LENZ 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 Eliem Therapeutics and LENZ Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and LENZ Therapeutics, you can compare the effects of market volatilities on Eliem Therapeutics and LENZ 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 Eliem Therapeutics with a short position of LENZ Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and LENZ Therapeutics.
Diversification Opportunities for Eliem Therapeutics and LENZ Therapeutics
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eliem and LENZ is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and LENZ Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LENZ Therapeutics 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 LENZ Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LENZ Therapeutics has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and LENZ Therapeutics go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and LENZ Therapeutics
Given the investment horizon of 90 days Eliem Therapeutics is expected to under-perform the LENZ Therapeutics. In addition to that, Eliem Therapeutics is 1.21 times more volatile than LENZ Therapeutics. It trades about -0.25 of its total potential returns per unit of risk. LENZ Therapeutics is currently generating about 0.33 per unit of volatility. If you would invest 2,821 in LENZ Therapeutics on August 30, 2024 and sell it today you would earn a total of 909.00 from holding LENZ Therapeutics or generate 32.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eliem Therapeutics vs. LENZ Therapeutics
Performance |
| Timeline |
| Eliem Therapeutics |
| LENZ Therapeutics |
Eliem Therapeutics and LENZ Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and LENZ Therapeutics
The main advantage of trading using opposite Eliem Therapeutics and LENZ Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, LENZ 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 LENZ Therapeutics will offset losses from the drop in LENZ Therapeutics' long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| LENZ Therapeutics vs. Ikena Oncology | LENZ Therapeutics vs. Eliem Therapeutics | LENZ Therapeutics vs. HCW Biologics | LENZ Therapeutics vs. RenovoRx |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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