Correlation Between BioCryst Pharmaceuticals and Elevation Oncology

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

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

Diversification Opportunities for BioCryst Pharmaceuticals and Elevation Oncology

-0.39

Correlation Coefficient

BioCryst Pharmaceuticals  Elevation Oncology

Very good diversification

The 3 months correlation between BioCryst and Elevation is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BioCryst Pharmaceuticals and Elevation Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Oncology and BioCryst Pharmaceuticals 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 BioCryst Pharmaceuticals 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 BioCryst Pharmaceuticals i.e., BioCryst Pharmaceuticals and Elevation Oncology go up and down completely randomly.

Pair Corralation between BioCryst Pharmaceuticals and Elevation Oncology

Given the investment horizon of 90 days BioCryst Pharmaceuticals is expected to generate 0.59 times more return on investment than Elevation Oncology. However, BioCryst Pharmaceuticals is 1.7 times less risky than Elevation Oncology. It trades about -0.03 of its potential returns per unit of risk. Elevation Oncology is currently generating about -0.21 per unit of risk. If you would invest  460.00  in BioCryst Pharmaceuticals on February 4, 2024 and sell it today you would lose (15.00) from holding BioCryst Pharmaceuticals or give up 3.26% of portfolio value over 90 days.

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

BioCryst Pharmaceuticals  vs.  Elevation Oncology

BioCryst Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BioCryst Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Elevation Oncology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Oncology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak 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 BioCryst Pharmaceuticals and Elevation Oncology

The main advantage of trading using opposite BioCryst Pharmaceuticals and Elevation Oncology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioCryst Pharmaceuticals 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 BioCryst Pharmaceuticals 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.