Correlation Between Harvard Apparatus and Evelo Biosciences

Can any of the company-specific risk be diversified away by investing in both Harvard Apparatus and Evelo Biosciences 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 Harvard Apparatus and Evelo Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Harvard Apparatus Regenerative and Evelo Biosciences, you can compare the effects of market volatilities on Harvard Apparatus and Evelo Biosciences 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 Harvard Apparatus with a short position of Evelo Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvard Apparatus and Evelo Biosciences.

Diversification Opportunities for Harvard Apparatus and Evelo Biosciences

-0.33

Correlation Coefficient

Harvard Apparatus  Evelo Biosciences

Very good diversification

The 3 months correlation between Harvard and Evelo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Harvard Apparatus Regenerative and Evelo Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evelo Biosciences and Harvard Apparatus 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 Harvard Apparatus Regenerative are associated (or correlated) with Evelo Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evelo Biosciences has no effect on the direction of Harvard Apparatus i.e., Harvard Apparatus and Evelo Biosciences go up and down completely randomly.

Pair Corralation between Harvard Apparatus and Evelo Biosciences

Given the investment horizon of 90 days Harvard Apparatus is expected to generate 19.49 times less return on investment than Evelo Biosciences. But when comparing it to its historical volatility, Harvard Apparatus Regenerative is 6.25 times less risky than Evelo Biosciences. It trades about 0.14 of its potential returns per unit of risk. Evelo Biosciences is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  323.00  in Evelo Biosciences on September 30, 2024 and sell it today you would earn a total of  500.00  from holding Evelo Biosciences or generate 154.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Harvard Apparatus Regenerative  vs.  Evelo Biosciences

Harvard Apparatus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harvard Apparatus Regenerative has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Harvard Apparatus is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Evelo Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evelo Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Evelo Biosciences is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Harvard Apparatus and Evelo Biosciences

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

The idea behind Harvard Apparatus Regenerative and Evelo Biosciences 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.