Correlation Between Cullinan Oncology and Enliven Therapeutics

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

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

Diversification Opportunities for Cullinan Oncology and Enliven Therapeutics

0.87

Correlation Coefficient

Cullinan Oncology  Enliven Therapeutics

Very poor diversification

The 3 months correlation between Cullinan and Enliven is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cullinan Oncology LLC and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven Therapeutics and Cullinan Oncology 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 Cullinan Oncology LLC 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 Cullinan Oncology i.e., Cullinan Oncology and Enliven Therapeutics go up and down completely randomly.

Pair Corralation between Cullinan Oncology and Enliven Therapeutics

Given the investment horizon of 90 days Cullinan Oncology is expected to generate 2.35 times less return on investment than Enliven Therapeutics. But when comparing it to its historical volatility, Cullinan Oncology LLC is 1.15 times less risky than Enliven Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Enliven Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,154  in Enliven Therapeutics on November 19, 2024 and sell it today you would earn a total of  14.00  from holding Enliven Therapeutics or generate 0.65% return on investment over 90 days.

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

Cullinan Oncology LLC  vs.  Enliven Therapeutics

Cullinan Oncology LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cullinan Oncology LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Enliven Therapeutics

Risk-Adjusted Performance

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 March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Cullinan Oncology and Enliven Therapeutics

The main advantage of trading using opposite Cullinan Oncology and Enliven Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullinan Oncology 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 Cullinan Oncology LLC 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.