Correlation Between BiOasis Technologies and Enliven Therapeutics

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

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

Diversification Opportunities for BiOasis Technologies and Enliven Therapeutics

-0.51

Correlation Coefficient

BiOasis Technologies  Enliven Therapeutics

Excellent diversification

The 3 months correlation between BiOasis and Enliven is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding biOasis Technologies and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven Therapeutics and BiOasis Technologies 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 biOasis Technologies are associated (or correlated) with Enliven Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enliven Therapeutics has no effect on the direction of BiOasis Technologies i.e., BiOasis Technologies and Enliven Therapeutics go up and down completely randomly.

Pair Corralation between BiOasis Technologies and Enliven Therapeutics

Assuming the 90 days horizon biOasis Technologies is expected to generate 3.46 times more return on investment than Enliven Therapeutics. However, BiOasis Technologies is 3.46 times more volatile than Enliven Therapeutics. It trades about 0.13 of its potential returns per unit of risk. Enliven Therapeutics is currently generating about -0.1 per unit of risk. If you would invest  0.01  in biOasis Technologies on October 26, 2024 and sell it today you would earn a total of  0.01  from holding biOasis Technologies or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

biOasis Technologies  vs.  Enliven Therapeutics

biOasis Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in biOasis Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BiOasis Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Enliven Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enliven 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 February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with BiOasis Technologies and Enliven Therapeutics

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

The idea behind biOasis Technologies and Enliven 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.