Correlation Between Elevation Oncology and Geron

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

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

Diversification Opportunities for Elevation Oncology and Geron

0.73

Correlation Coefficient

Elevation Oncology  Geron

Poor diversification

The 3 months correlation between Elevation and Geron is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and Geron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geron 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 Geron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geron has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and Geron go up and down completely randomly.

Pair Corralation between Elevation Oncology and Geron

Given the investment horizon of 90 days Elevation Oncology is expected to generate 1.55 times more return on investment than Geron. However, Elevation Oncology is 1.55 times more volatile than Geron. It trades about -0.11 of its potential returns per unit of risk. Geron is currently generating about -0.19 per unit of risk. If you would invest  57.00  in Elevation Oncology on December 30, 2024 and sell it today you would lose (31.00) from holding Elevation Oncology or give up 54.39% of portfolio value over 90 days.

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

Elevation Oncology  vs.  Geron

Elevation Oncology

Risk-Adjusted Performance

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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Geron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Geron 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Elevation Oncology and Geron

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

The idea behind Elevation Oncology and Geron 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.