Correlation Between Inventiva and Eledon Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Inventiva and Eledon Pharmaceuticals 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 Inventiva and Eledon Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inventiva Sa and Eledon Pharmaceuticals, you can compare the effects of market volatilities on Inventiva and Eledon Pharmaceuticals 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 Inventiva with a short position of Eledon Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inventiva and Eledon Pharmaceuticals.
Diversification Opportunities for Inventiva and Eledon Pharmaceuticals
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inventiva and Eledon is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Inventiva Sa and Eledon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eledon Pharmaceuticals and Inventiva 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 Inventiva Sa are associated (or correlated) with Eledon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eledon Pharmaceuticals has no effect on the direction of Inventiva i.e., Inventiva and Eledon Pharmaceuticals go up and down completely randomly.
Pair Corralation between Inventiva and Eledon Pharmaceuticals
Considering the 90-day investment horizon Inventiva Sa is expected to under-perform the Eledon Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Inventiva Sa is 3.3 times less risky than Eledon Pharmaceuticals. The stock trades about -0.02 of its potential returns per unit of risk. The Eledon Pharmaceuticals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 337.00 in Eledon Pharmaceuticals on August 28, 2024 and sell it today you would earn a total of 64.00 from holding Eledon Pharmaceuticals or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inventiva Sa vs. Eledon Pharmaceuticals
Performance |
| Timeline |
| Inventiva Sa |
| Eledon Pharmaceuticals |
Inventiva and Eledon Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inventiva and Eledon Pharmaceuticals
The main advantage of trading using opposite Inventiva and Eledon Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inventiva position performs unexpectedly, Eledon Pharmaceuticals 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 Eledon Pharmaceuticals will offset losses from the drop in Eledon Pharmaceuticals' long position.| Inventiva vs. Mineralys Therapeutics, Common | Inventiva vs. Eliem Therapeutics | Inventiva vs. Anebulo Pharmaceuticals | Inventiva vs. Janux Therapeutics |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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