Correlation Between Cheniere Energy and Elicio Therapeutics

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

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

Diversification Opportunities for Cheniere Energy and Elicio Therapeutics

0.49

Correlation Coefficient

Cheniere Energy  Elicio Therapeutics

Very weak diversification

The 3 months correlation between Cheniere and Elicio is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Elicio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elicio Therapeutics and Cheniere Energy 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 Cheniere Energy Partners are associated (or correlated) with Elicio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elicio Therapeutics has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Elicio Therapeutics go up and down completely randomly.

Pair Corralation between Cheniere Energy and Elicio Therapeutics

Considering the 90-day investment horizon Cheniere Energy is expected to generate 3.97 times less return on investment than Elicio Therapeutics. But when comparing it to its historical volatility, Cheniere Energy Partners is 4.12 times less risky than Elicio Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Elicio Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  882.00  in Elicio Therapeutics on September 25, 2024 and sell it today you would lose (358.00) from holding Elicio Therapeutics or give up 40.59% of portfolio value over 90 days.

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

Cheniere Energy Partners  vs.  Elicio Therapeutics

Cheniere Energy Partners

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheniere Energy Partners are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cheniere Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Elicio Therapeutics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elicio Therapeutics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Elicio Therapeutics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cheniere Energy and Elicio Therapeutics

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

The idea behind Cheniere Energy Partners and Elicio 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.