Correlation Between ATyr Pharma and Enliven Therapeutics

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

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

Diversification Opportunities for ATyr Pharma and Enliven Therapeutics

-0.11

Correlation Coefficient

ATyr Pharma  Enliven Therapeutics

Good diversification

The 3 months correlation between ATyr and Enliven is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding ATyr Pharma and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven Therapeutics and ATyr Pharma 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 ATyr Pharma are associated (or correlated) with Enliven Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enliven Therapeutics has no effect on the direction of ATyr Pharma i.e., ATyr Pharma and Enliven Therapeutics go up and down completely randomly.

Pair Corralation between ATyr Pharma and Enliven Therapeutics

If you would invest  2,220  in Enliven Therapeutics on September 2, 2024 and sell it today you would earn a total of  218.00  from holding Enliven Therapeutics or generate 9.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ATyr Pharma  vs.  Enliven Therapeutics

ATyr Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATyr Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ATyr Pharma is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Enliven Therapeutics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enliven Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Enliven Therapeutics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ATyr Pharma and Enliven Therapeutics

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

The idea behind ATyr Pharma and Enliven 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.