Correlation Between Heritage Global and Enlivex Therapeutics

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

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

Diversification Opportunities for Heritage Global and Enlivex Therapeutics

0.16

Correlation Coefficient

Heritage Global  Enlivex Therapeutics

Average diversification

The 3 months correlation between Heritage and Enlivex is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Heritage Global and Enlivex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlivex Therapeutics and Heritage Global 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 Heritage Global are associated (or correlated) with Enlivex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlivex Therapeutics has no effect on the direction of Heritage Global i.e., Heritage Global and Enlivex Therapeutics go up and down completely randomly.

Pair Corralation between Heritage Global and Enlivex Therapeutics

Given the investment horizon of 90 days Heritage Global is expected to generate 0.43 times more return on investment than Enlivex Therapeutics. However, Heritage Global is 2.31 times less risky than Enlivex Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Enlivex Therapeutics is currently generating about 0.0 per unit of risk. If you would invest  171.00  in Heritage Global on September 2, 2024 and sell it today you would earn a total of  5.00  from holding Heritage Global or generate 2.92% return on investment over 90 days.

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

Heritage Global  vs.  Enlivex Therapeutics

Heritage Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Heritage Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Heritage Global is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Heritage Global and Enlivex Therapeutics

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

The idea behind Heritage Global and Enlivex 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.