Correlation Between Freeline Therapeutics and Eliem Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Freeline Therapeutics and Eliem Therapeutics 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 Freeline Therapeutics and Eliem Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freeline Therapeutics Holdings and Eliem Therapeutics, you can compare the effects of market volatilities on Freeline Therapeutics and Eliem Therapeutics 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 Freeline Therapeutics with a short position of Eliem Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeline Therapeutics and Eliem Therapeutics.

Diversification Opportunities for Freeline Therapeutics and Eliem Therapeutics

FreelineEliemDiversified AwayFreelineEliemDiversified Away100%
0.41
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between Freeline Therapeutics and Eliem Therapeutics

If you would invest  431.00  in Freeline Therapeutics Holdings on September 14, 2024 and sell it today you would earn a total of  0.00  from holding Freeline Therapeutics Holdings or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy1.72%
ValuesDaily Returns

Freeline Therapeutics Holdings  vs.  Eliem Therapeutics

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -60-40-20020
JavaScript chart by amCharts 3.21.15FRLN ELYM
       Timeline  
Freeline Therapeutics 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Freeline Therapeutics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Freeline Therapeutics is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Eliem Therapeutics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Freeline Therapeutics and Eliem Therapeutics Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-16.69-12.5-8.31-4.12-0.06983.958.112.2516.4120.56 0.0050.0100.015
JavaScript chart by amCharts 3.21.15FRLN ELYM
       Returns  

Pair Trading with Freeline Therapeutics and Eliem Therapeutics

The main advantage of trading using opposite Freeline Therapeutics and Eliem Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeline Therapeutics position performs unexpectedly, Eliem Therapeutics 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 Eliem Therapeutics will offset losses from the drop in Eliem Therapeutics' long position.
The idea behind Freeline Therapeutics Holdings and Eliem Therapeutics 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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