Correlation Between Elevation Oncology and ATI Physical

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

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

Diversification Opportunities for Elevation Oncology and ATI Physical

-0.32

Correlation Coefficient

Elevation Oncology  ATI Physical

Very good diversification

The 3 months correlation between Elevation and ATI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy and Elevation Oncology 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 Elevation Oncology are associated (or correlated) with ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and ATI Physical go up and down completely randomly.

Pair Corralation between Elevation Oncology and ATI Physical

Given the investment horizon of 90 days Elevation Oncology is expected to under-perform the ATI Physical. In addition to that, Elevation Oncology is 1.82 times more volatile than ATI Physical Therapy. It trades about -0.19 of its total potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.14 per unit of volatility. If you would invest  515.00  in ATI Physical Therapy on February 5, 2024 and sell it today you would lose (52.00) from holding ATI Physical Therapy or give up 10.1% of portfolio value over 90 days.

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

Elevation Oncology  vs.  ATI Physical Therapy

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.

ATI Physical Therapy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATI Physical Therapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Elevation Oncology and ATI Physical

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

The idea behind Elevation Oncology and ATI Physical Therapy 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.