Correlation Between Enlivex Therapeutics and Amylyx Pharmaceuticals

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

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

Diversification Opportunities for Enlivex Therapeutics and Amylyx Pharmaceuticals

-0.41

Correlation Coefficient

Enlivex Therapeutics  Amylyx Pharmaceuticals

Very good diversification

The 3 months correlation between Enlivex and Amylyx is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Enlivex Therapeutics and Amylyx Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amylyx Pharmaceuticals and Enlivex 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 Enlivex Therapeutics are associated (or correlated) with Amylyx Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amylyx Pharmaceuticals has no effect on the direction of Enlivex Therapeutics i.e., Enlivex Therapeutics and Amylyx Pharmaceuticals go up and down completely randomly.

Pair Corralation between Enlivex Therapeutics and Amylyx Pharmaceuticals

Given the investment horizon of 90 days Enlivex Therapeutics is expected to generate 1.0 times more return on investment than Amylyx Pharmaceuticals. However, Enlivex Therapeutics is 1.0 times more volatile than Amylyx Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Amylyx Pharmaceuticals is currently generating about -0.01 per unit of risk. If you would invest  270.00  in Enlivex Therapeutics on August 31, 2024 and sell it today you would lose (156.00) from holding Enlivex Therapeutics or give up 57.78% of portfolio value over 90 days.

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

Enlivex Therapeutics  vs.  Amylyx Pharmaceuticals

Enlivex Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlivex Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Enlivex Therapeutics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Amylyx Pharmaceuticals

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amylyx Pharmaceuticals are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Amylyx Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enlivex Therapeutics and Amylyx Pharmaceuticals

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

The idea behind Enlivex Therapeutics and Amylyx Pharmaceuticals 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.