Correlation Between Enliven Therapeutics and Elevation Oncology

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

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

Diversification Opportunities for Enliven Therapeutics and Elevation Oncology

-0.4

Correlation Coefficient

Enliven Therapeutics  Elevation Oncology

Very good diversification

The 3 months correlation between Enliven and Elevation is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Enliven Therapeutics and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and Enliven Therapeutics 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 Enliven Therapeutics 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 Enliven Therapeutics i.e., Enliven Therapeutics and Elevation Oncology go up and down completely randomly.

Pair Corralation between Enliven Therapeutics and Elevation Oncology

Given the investment horizon of 90 days Enliven Therapeutics is expected to under-perform the Elevation Oncology. But the stock apears to be less risky and, when comparing its historical volatility, Enliven Therapeutics is 2.1 times less risky than Elevation Oncology. The stock trades about -0.09 of its potential returns per unit of risk. The Elevation Oncology is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  57.00  in Elevation Oncology on October 24, 2024 and sell it today you would earn a total of  14.00  from holding Elevation Oncology or generate 24.56% return on investment over 90 days.

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

Enliven Therapeutics  vs.  Elevation Oncology

Enliven Therapeutics

Risk-Adjusted Performance

0 of 100

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

Elevation Oncology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Oncology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, Elevation Oncology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enliven Therapeutics and Elevation Oncology

The main advantage of trading using opposite Enliven Therapeutics and Elevation Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enliven Therapeutics 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 Enliven Therapeutics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..