Correlation Between BioLine RX and Enlivex Therapeutics

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

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

Diversification Opportunities for BioLine RX and Enlivex Therapeutics

0.34

Correlation Coefficient

BioLine RX  Enlivex Therapeutics

Weak diversification

The 3 months correlation between BioLine and Enlivex is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BioLine RX and Enlivex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlivex Therapeutics and BioLine RX 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 BioLine RX are associated (or correlated) with Enlivex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlivex Therapeutics has no effect on the direction of BioLine RX i.e., BioLine RX and Enlivex Therapeutics go up and down completely randomly.

Pair Corralation between BioLine RX and Enlivex Therapeutics

Assuming the 90 days trading horizon BioLine RX is expected to under-perform the Enlivex Therapeutics. In addition to that, BioLine RX is 1.57 times more volatile than Enlivex Therapeutics. It trades about -0.27 of its total potential returns per unit of risk. Enlivex Therapeutics is currently generating about -0.14 per unit of volatility. If you would invest  60,540  in Enlivex Therapeutics on September 13, 2024 and sell it today you would lose (15,020) from holding Enlivex Therapeutics or give up 24.81% of portfolio value over 90 days.

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

BioLine RX  vs.  Enlivex Therapeutics

BioLine RX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioLine RX has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Enlivex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlivex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BioLine RX and Enlivex Therapeutics

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

The idea behind BioLine RX and Enlivex 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.