Correlation Between Bio Path and Elicio Therapeutics

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

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

Diversification Opportunities for Bio Path and Elicio Therapeutics

-0.27

Correlation Coefficient

Bio Path  Elicio Therapeutics

Very good diversification

The 3 months correlation between Bio and Elicio is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and Elicio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicio Therapeutics and Bio Path 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 Bio Path Holdings are associated (or correlated) with Elicio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicio Therapeutics has no effect on the direction of Bio Path i.e., Bio Path and Elicio Therapeutics go up and down completely randomly.

Pair Corralation between Bio Path and Elicio Therapeutics

Given the investment horizon of 90 days Bio Path Holdings is expected to generate 7.93 times more return on investment than Elicio Therapeutics. However, Bio Path is 7.93 times more volatile than Elicio Therapeutics. It trades about 0.19 of its potential returns per unit of risk. Elicio Therapeutics is currently generating about 0.03 per unit of risk. If you would invest  64.00  in Bio Path Holdings on October 8, 2024 and sell it today you would earn a total of  52.00  from holding Bio Path Holdings or generate 81.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bio Path Holdings  vs.  Elicio Therapeutics

Bio Path Holdings

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bio Path Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Bio Path demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Elicio Therapeutics

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elicio Therapeutics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Elicio Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bio Path and Elicio Therapeutics

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

The idea behind Bio Path Holdings and Elicio 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.