Correlation Between Elevation Oncology and Unity Biotechnology

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

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

Diversification Opportunities for Elevation Oncology and Unity Biotechnology

0.16

Correlation Coefficient

Elevation Oncology  Unity Biotechnology

Average diversification

The 3 months correlation between Elevation and Unity is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and Unity Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Biotechnology and Elevation Oncology 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 Elevation Oncology are associated (or correlated) with Unity Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Biotechnology has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and Unity Biotechnology go up and down completely randomly.

Pair Corralation between Elevation Oncology and Unity Biotechnology

Given the investment horizon of 90 days Elevation Oncology is expected to generate 0.42 times more return on investment than Unity Biotechnology. However, Elevation Oncology is 2.36 times less risky than Unity Biotechnology. It trades about 0.11 of its potential returns per unit of risk. Unity Biotechnology is currently generating about -0.28 per unit of risk. If you would invest  30.00  in Elevation Oncology on May 15, 2025 and sell it today you would earn a total of  7.00  from holding Elevation Oncology or generate 23.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.85%
Values	Daily Returns

Elevation Oncology  vs.  Unity Biotechnology

Elevation Oncology

Risk-Adjusted Performance

Fair

Over the last 90 days Elevation Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak technical and fundamental indicators, Elevation Oncology showed solid returns over the last few months and may actually be approaching a breakup point.

Unity Biotechnology

Risk-Adjusted Performance

Weakest

Over the last 90 days Unity Biotechnology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Elevation Oncology and Unity Biotechnology

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

The idea behind Elevation Oncology and Unity Biotechnology 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.