Correlation Between Elevation Oncology and EnGene Holdings

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

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

Diversification Opportunities for Elevation Oncology and EnGene Holdings

-0.02

Correlation Coefficient

Elevation Oncology  EnGene Holdings

Good diversification

The 3 months correlation between Elevation and EnGene is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and enGene Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enGene Holdings Common and Elevation 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 Elevation Oncology are associated (or correlated) with EnGene Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enGene Holdings Common has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and EnGene Holdings go up and down completely randomly.

Pair Corralation between Elevation Oncology and EnGene Holdings

Given the investment horizon of 90 days Elevation Oncology is expected to generate 0.72 times more return on investment than EnGene Holdings. However, Elevation Oncology is 1.4 times less risky than EnGene Holdings. It trades about 0.15 of its potential returns per unit of risk. enGene Holdings Common is currently generating about 0.06 per unit of risk. If you would invest  52.00  in Elevation Oncology on October 9, 2024 and sell it today you would earn a total of  32.00  from holding Elevation Oncology or generate 61.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Elevation Oncology  vs.  enGene Holdings Common

Elevation Oncology

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Oncology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Elevation Oncology showed solid returns over the last few months and may actually be approaching a breakup point.

enGene Holdings Common

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in enGene Holdings Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, EnGene Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elevation Oncology and EnGene Holdings

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

The idea behind Elevation Oncology and enGene Holdings Common 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.