Correlation Between Eliem Therapeutics and Bionomics

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

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

Diversification Opportunities for Eliem Therapeutics and Bionomics

0.39

Correlation Coefficient

Eliem Therapeutics  Bionomics

Weak diversification

The 3 months correlation between Eliem and Bionomics is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Eliem Therapeutics and Bionomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics Limited and Eliem 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 Eliem Therapeutics are associated (or correlated) with Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics Limited has no effect on the direction of Eliem Therapeutics i.e., Eliem Therapeutics and Bionomics go up and down completely randomly.

Pair Corralation between Eliem Therapeutics and Bionomics

If you would invest  1.31  in Bionomics Limited on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Bionomics Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.72%
Values	Daily Returns

Eliem Therapeutics  vs.  Bionomics Limited

Eliem Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Bionomics Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bionomics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Bionomics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eliem Therapeutics and Bionomics

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

The idea behind Eliem Therapeutics and Bionomics Limited 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.