Correlation Between Eliem Therapeutics and Sana Biotechnology
Can any of the company-specific risk be diversified away by investing in both Eliem Therapeutics and Sana Biotechnology 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 Sana Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eliem Therapeutics and Sana Biotechnology, you can compare the effects of market volatilities on Eliem Therapeutics and Sana Biotechnology 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 Sana Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eliem Therapeutics and Sana Biotechnology.
Diversification Opportunities for Eliem Therapeutics and Sana Biotechnology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eliem and Sana is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and Sana Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sana Biotechnology 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 Sana Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sana Biotechnology has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and Sana Biotechnology go up and down completely randomly.
Pair Corralation between Eliem Therapeutics and Sana Biotechnology
Given the investment horizon of 90 days Eliem Therapeutics is expected to generate 0.93 times more return on investment than Sana Biotechnology. However, Eliem Therapeutics is 1.07 times less risky than Sana Biotechnology. It trades about -0.22 of its potential returns per unit of risk. Sana Biotechnology is currently generating about -0.29 per unit of risk. If you would invest 392.00 in Eliem Therapeutics on August 31, 2024 and sell it today you would lose (88.00) from holding Eliem Therapeutics or give up 22.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eliem Therapeutics vs. Sana Biotechnology
Performance |
| Timeline |
| Eliem Therapeutics |
| Sana Biotechnology |
Eliem Therapeutics and Sana Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eliem Therapeutics and Sana Biotechnology
The main advantage of trading using opposite Eliem Therapeutics and Sana Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eliem Therapeutics position performs unexpectedly, Sana Biotechnology 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 Sana Biotechnology will offset losses from the drop in Sana Biotechnology's long position.| Eliem Therapeutics vs. Pmv Pharmaceuticals | Eliem Therapeutics vs. MediciNova | Eliem Therapeutics vs. Pharvaris BV | Eliem Therapeutics vs. PepGen |
| Sana Biotechnology vs. Cue Biopharma | Sana Biotechnology vs. Eliem Therapeutics | Sana Biotechnology vs. Inhibrx | Sana Biotechnology vs. Molecular Partners AG |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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