Correlation Between Amylyx Pharmaceuticals and Elevation Oncology

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

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

Diversification Opportunities for Amylyx Pharmaceuticals and Elevation Oncology

0.31

Correlation Coefficient

Amylyx Pharmaceuticals  Elevation Oncology

Weak diversification

The 3 months correlation between Amylyx and Elevation is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amylyx Pharmaceuticals and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and Amylyx 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 Amylyx Pharmaceuticals 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 Amylyx Pharmaceuticals i.e., Amylyx Pharmaceuticals and Elevation Oncology go up and down completely randomly.

Pair Corralation between Amylyx Pharmaceuticals and Elevation Oncology

Given the investment horizon of 90 days Amylyx Pharmaceuticals is expected to under-perform the Elevation Oncology. But the etf apears to be less risky and, when comparing its historical volatility, Amylyx Pharmaceuticals is 1.32 times less risky than Elevation Oncology. The etf trades about -0.26 of its potential returns per unit of risk. The Elevation Oncology is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  61.00  in Elevation Oncology on September 22, 2024 and sell it today you would lose (3.00) from holding Elevation Oncology or give up 4.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Amylyx Pharmaceuticals  vs.  Elevation Oncology

Amylyx Pharmaceuticals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amylyx Pharmaceuticals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Amylyx Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Elevation Oncology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Oncology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Elevation Oncology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amylyx Pharmaceuticals and Elevation Oncology

The main advantage of trading using opposite Amylyx Pharmaceuticals and Elevation Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amylyx Pharmaceuticals 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 Amylyx Pharmaceuticals 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.