Correlation Between Acrivon Therapeutics, and Eliem Therapeutics

Can any of the company-specific risk be diversified away by investing in both Acrivon Therapeutics, and Eliem Therapeutics 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 Acrivon Therapeutics, and Eliem Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acrivon Therapeutics, Common and Eliem Therapeutics, you can compare the effects of market volatilities on Acrivon Therapeutics, and Eliem Therapeutics 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 Acrivon Therapeutics, with a short position of Eliem Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acrivon Therapeutics, and Eliem Therapeutics.

Diversification Opportunities for Acrivon Therapeutics, and Eliem Therapeutics

0.33

Correlation Coefficient

Acrivon Therapeutics,  Eliem Therapeutics

Weak diversification

The 3 months correlation between Acrivon and Eliem is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Acrivon Therapeutics, Common and Eliem Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eliem Therapeutics and Acrivon 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 Acrivon Therapeutics, Common are associated (or correlated) with Eliem Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eliem Therapeutics has no effect on the direction of Acrivon Therapeutics, i.e., Acrivon Therapeutics, and Eliem Therapeutics go up and down completely randomly.

Pair Corralation between Acrivon Therapeutics, and Eliem Therapeutics

Given the investment horizon of 90 days Acrivon Therapeutics, is expected to generate 3.77 times less return on investment than Eliem Therapeutics. But when comparing it to its historical volatility, Acrivon Therapeutics, Common is 1.05 times less risky than Eliem Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Eliem Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  251.00  in Eliem Therapeutics on August 26, 2024 and sell it today you would earn a total of  49.00  from holding Eliem Therapeutics or generate 19.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Acrivon Therapeutics, Common  vs.  Eliem Therapeutics

Acrivon Therapeutics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acrivon Therapeutics, Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Eliem Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eliem Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Acrivon Therapeutics, and Eliem Therapeutics

The main advantage of trading using opposite Acrivon Therapeutics, and Eliem Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acrivon Therapeutics, position performs unexpectedly, Eliem Therapeutics 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 Eliem Therapeutics will offset losses from the drop in Eliem Therapeutics' long position.

The idea behind Acrivon Therapeutics, Common and Eliem Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.