Correlation Between Elevation Oncology and PDS Biotechnology

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

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

Diversification Opportunities for Elevation Oncology and PDS Biotechnology

-0.18

Correlation Coefficient

Elevation Oncology  PDS Biotechnology

Good diversification

The 3 months correlation between Elevation and PDS is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and PDS Biotechnology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDS Biotechnology Corp 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 PDS Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDS Biotechnology Corp has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and PDS Biotechnology go up and down completely randomly.

Pair Corralation between Elevation Oncology and PDS Biotechnology

Given the investment horizon of 90 days Elevation Oncology is expected to generate 1.23 times more return on investment than PDS Biotechnology. However, Elevation Oncology is 1.23 times more volatile than PDS Biotechnology Corp. It trades about -0.01 of its potential returns per unit of risk. PDS Biotechnology Corp is currently generating about -0.15 per unit of risk. If you would invest  64.00  in Elevation Oncology on November 28, 2024 and sell it today you would lose (10.00) from holding Elevation Oncology or give up 15.62% of portfolio value over 90 days.

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

Elevation Oncology  vs.  PDS Biotechnology Corp

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 fairly stable technical and fundamental indicators, Elevation Oncology is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

PDS Biotechnology Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days PDS Biotechnology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Elevation Oncology and PDS Biotechnology

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

The idea behind Elevation Oncology and PDS Biotechnology Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.