Correlation Between Unity Biotechnology and Elevation Oncology

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

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

Diversification Opportunities for Unity Biotechnology and Elevation Oncology

-0.36

Correlation Coefficient

Unity Biotechnology  Elevation Oncology

Very good diversification

The 3 months correlation between Unity and Elevation is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Unity Biotechnology and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and Unity Biotechnology 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 Unity Biotechnology are associated (or correlated) with Elevation Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Oncology has no effect on the direction of Unity Biotechnology i.e., Unity Biotechnology and Elevation Oncology go up and down completely randomly.

Pair Corralation between Unity Biotechnology and Elevation Oncology

Considering the 90-day investment horizon Unity Biotechnology is expected to under-perform the Elevation Oncology. In addition to that, Unity Biotechnology is 2.16 times more volatile than Elevation Oncology. It trades about -0.3 of its total potential returns per unit of risk. Elevation Oncology is currently generating about 0.06 per unit of volatility. If you would invest  34.00  in Elevation Oncology on May 9, 2025 and sell it today you would earn a total of  3.00  from holding Elevation Oncology or generate 8.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.35%
Values	Daily Returns

Unity Biotechnology  vs.  Elevation Oncology

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.

Elevation Oncology

Risk-Adjusted Performance

Soft

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.

Pair Trading with Unity Biotechnology and Elevation Oncology

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

The idea behind Unity Biotechnology and Elevation Oncology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.