Correlation Between Eliem Therapeutics and PepGen
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and PepGen 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 PepGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and PepGen, you can compare the effects of market volatilities on Eliem Therapeutics and PepGen 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 PepGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and PepGen.
Diversification Opportunities for Eliem Therapeutics and PepGen
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eliem and PepGen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and PepGen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PepGen 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 PepGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PepGen has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and PepGen go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and PepGen
Given the investment horizon of 90 days Eliem Therapeutics is expected to generate 0.8 times more return on investment than PepGen. However, Eliem Therapeutics is 1.26 times less risky than PepGen. It trades about -0.36 of its potential returns per unit of risk. PepGen is currently generating about -0.45 per unit of risk. If you would invest 475.00 in Eliem Therapeutics on August 24, 2024 and sell it today you would lose (167.00) from holding Eliem Therapeutics or give up 35.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eliem Therapeutics vs. PepGen
Performance |
| Timeline |
| Eliem Therapeutics |
| PepGen |
Eliem Therapeutics and PepGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and PepGen
The main advantage of trading using opposite Eliem Therapeutics and PepGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, PepGen 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 PepGen will offset losses from the drop in PepGen's long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| PepGen vs. Pmv Pharmaceuticals | PepGen vs. Eliem Therapeutics | PepGen vs. MediciNova | PepGen vs. Pharvaris BV |
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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