Correlation Between Elevation Oncology and Ginkgo Bioworks

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

By analyzing existing cross correlation between Elevation Oncology and Ginkgo Bioworks Holdings, you can compare the effects of market volatilities on Elevation Oncology and Ginkgo Bioworks 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 Ginkgo Bioworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevation Oncology and Ginkgo Bioworks.

Diversification Opportunities for Elevation Oncology and Ginkgo Bioworks

0.29

Correlation Coefficient

Elevation Oncology  Ginkgo Bioworks

Modest diversification

The 3 months correlation between Elevation and Ginkgo is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Elevation Oncology and Ginkgo Bioworks Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ginkgo Bioworks Holdings 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 Ginkgo Bioworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ginkgo Bioworks Holdings has no effect on the direction of Elevation Oncology i.e., Elevation Oncology and Ginkgo Bioworks go up and down completely randomly.

Pair Corralation between Elevation Oncology and Ginkgo Bioworks

Given the investment horizon of 90 days Elevation Oncology is expected to generate 2.49 times less return on investment than Ginkgo Bioworks. But when comparing it to its historical volatility, Elevation Oncology is 1.25 times less risky than Ginkgo Bioworks. It trades about 0.09 of its potential returns per unit of risk. Ginkgo Bioworks Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  627.00  in Ginkgo Bioworks Holdings on September 12, 2024 and sell it today you would earn a total of  476.00  from holding Ginkgo Bioworks Holdings or generate 75.92% return on investment over 90 days.

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

Elevation Oncology  vs.  Ginkgo Bioworks Holdings

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.

Ginkgo Bioworks Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ginkgo Bioworks Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ginkgo Bioworks sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elevation Oncology and Ginkgo Bioworks

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

The idea behind Elevation Oncology and Ginkgo Bioworks Holdings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.