Correlation Between Eledon Pharmaceuticals and Cytek Biosciences

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Can any of the company-specific risk be diversified away by investing in both Eledon Pharmaceuticals and Cytek 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 Eledon Pharmaceuticals and Cytek Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eledon Pharmaceuticals and Cytek Biosciences, you can compare the effects of market volatilities on Eledon Pharmaceuticals and Cytek 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 Eledon Pharmaceuticals with a short position of Cytek Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eledon Pharmaceuticals and Cytek Biosciences.

Diversification Opportunities for Eledon Pharmaceuticals and Cytek Biosciences

-0.33
  Correlation Coefficient

Very good diversification

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

Pair Corralation between Eledon Pharmaceuticals and Cytek Biosciences

Given the investment horizon of 90 days Eledon Pharmaceuticals is expected to under-perform the Cytek Biosciences. In addition to that, Eledon Pharmaceuticals is 1.08 times more volatile than Cytek Biosciences. It trades about -0.04 of its total potential returns per unit of risk. Cytek Biosciences is currently generating about 0.2 per unit of volatility. If you would invest  257.00  in Cytek Biosciences on May 25, 2025 and sell it today you would earn a total of  158.00  from holding Cytek Biosciences or generate 61.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Eledon Pharmaceuticals  vs.  Cytek Biosciences

 Performance 
       Timeline  
Eledon Pharmaceuticals 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Eledon Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
Cytek Biosciences 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Cytek Biosciences are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward-looking signals, Cytek Biosciences sustained solid returns over the last few months and may actually be approaching a breakup point.

Eledon Pharmaceuticals and Cytek Biosciences Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eledon Pharmaceuticals and Cytek Biosciences

The main advantage of trading using opposite Eledon Pharmaceuticals and Cytek Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eledon Pharmaceuticals position performs unexpectedly, Cytek 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 Cytek Biosciences will offset losses from the drop in Cytek Biosciences' long position.
The idea behind Eledon Pharmaceuticals and Cytek Biosciences 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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