Correlation Between Eliem Therapeutics and Revelation Biosciences
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and Revelation Biosciences 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 Revelation Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and Revelation Biosciences, you can compare the effects of market volatilities on Eliem Therapeutics and Revelation Biosciences 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 Revelation Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and Revelation Biosciences.
Diversification Opportunities for Eliem Therapeutics and Revelation Biosciences
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Eliem and Revelation is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and Revelation Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revelation Biosciences 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 Revelation Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revelation Biosciences has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and Revelation Biosciences go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and Revelation Biosciences
Given the investment horizon of 90 days Eliem Therapeutics is expected to under-perform the Revelation Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, Eliem Therapeutics is 1.84 times less risky than Revelation Biosciences. The stock trades about -0.25 of its potential returns per unit of risk. The Revelation Biosciences is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.29 in Revelation Biosciences on August 30, 2024 and sell it today you would lose (0.06) from holding Revelation Biosciences or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eliem Therapeutics vs. Revelation Biosciences
Performance |
| Timeline |
| Eliem Therapeutics |
| Revelation Biosciences |
Eliem Therapeutics and Revelation Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and Revelation Biosciences
The main advantage of trading using opposite Eliem Therapeutics and Revelation Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, Revelation Biosciences 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 Revelation Biosciences will offset losses from the drop in Revelation Biosciences' long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| Revelation Biosciences vs. Ikena Oncology | Revelation Biosciences vs. Eliem Therapeutics | Revelation Biosciences vs. HCW Biologics | Revelation Biosciences 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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