Correlation Between Eliem Therapeutics and Revolution Medicines
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and Revolution Medicines 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 Revolution Medicines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and Revolution Medicines, you can compare the effects of market volatilities on Eliem Therapeutics and Revolution Medicines 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 Revolution Medicines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and Revolution Medicines.
Diversification Opportunities for Eliem Therapeutics and Revolution Medicines
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eliem and Revolution is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and Revolution Medicines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolution Medicines 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 Revolution Medicines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolution Medicines has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and Revolution Medicines go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and Revolution Medicines
Given the investment horizon of 90 days Eliem Therapeutics is expected to under-perform the Revolution Medicines. In addition to that, Eliem Therapeutics is 1.92 times more volatile than Revolution Medicines. It trades about -0.29 of its total potential returns per unit of risk. Revolution Medicines is currently generating about 0.38 per unit of volatility. If you would invest 4,775 in Revolution Medicines on August 29, 2024 and sell it today you would earn a total of 1,088 from holding Revolution Medicines or generate 22.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Eliem Therapeutics vs. Revolution Medicines
Performance |
| Timeline |
| Eliem Therapeutics |
| Revolution Medicines |
Eliem Therapeutics and Revolution Medicines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and Revolution Medicines
The main advantage of trading using opposite Eliem Therapeutics and Revolution Medicines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, Revolution Medicines 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 Revolution Medicines will offset losses from the drop in Revolution Medicines' long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| Revolution Medicines vs. Eliem Therapeutics | Revolution Medicines vs. Scpharmaceuticals | Revolution Medicines vs. Milestone Pharmaceuticals | Revolution Medicines vs. Seres 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |