Correlation Between Caribou Biosciences and Elevation Oncology

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

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

Diversification Opportunities for Caribou Biosciences and Elevation Oncology

0.21

Correlation Coefficient

Caribou Biosciences  Elevation Oncology

Modest diversification

The 3 months correlation between Caribou and Elevation is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Caribou Biosciences and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and Caribou Biosciences 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 Caribou Biosciences 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 Caribou Biosciences i.e., Caribou Biosciences and Elevation Oncology go up and down completely randomly.

Pair Corralation between Caribou Biosciences and Elevation Oncology

Given the investment horizon of 90 days Caribou Biosciences is expected to under-perform the Elevation Oncology. But the stock apears to be less risky and, when comparing its historical volatility, Caribou Biosciences is 1.86 times less risky than Elevation Oncology. The stock trades about -0.02 of its potential returns per unit of risk. The Elevation Oncology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  93.00  in Elevation Oncology on August 30, 2024 and sell it today you would lose (31.00) from holding Elevation Oncology or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Caribou Biosciences  vs.  Elevation Oncology

Caribou Biosciences

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Caribou Biosciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Caribou Biosciences may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Elevation Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elevation Oncology 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 technical and fundamental indicators remain fairly stable which may send shares a bit higher in December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Caribou Biosciences and Elevation Oncology

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

Check out your portfolio center.

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 Money Managers module to screen money managers from public funds and ETFs managed around the world.