Correlation Between Arcus Biosciences and Elutia

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

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

Diversification Opportunities for Arcus Biosciences and Elutia

-0.17

Correlation Coefficient

Arcus Biosciences  Elutia

Good diversification

The 3 months correlation between Arcus and Elutia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Arcus Biosciences and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia Inc and Arcus Biosciences 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 Arcus Biosciences are associated (or correlated) with Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of Arcus Biosciences i.e., Arcus Biosciences and Elutia go up and down completely randomly.

Pair Corralation between Arcus Biosciences and Elutia

Given the investment horizon of 90 days Arcus Biosciences is expected to generate 1.21 times less return on investment than Elutia. But when comparing it to its historical volatility, Arcus Biosciences is 2.86 times less risky than Elutia. It trades about 0.14 of its potential returns per unit of risk. Elutia Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  416.00  in Elutia Inc on September 25, 2024 and sell it today you would earn a total of  16.00  from holding Elutia Inc or generate 3.85% return on investment over 90 days.

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

Arcus Biosciences  vs.  Elutia Inc

Arcus Biosciences

Risk-Adjusted Performance

2 of 100

Weak

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

Elutia Inc

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Elutia Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Elutia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Arcus Biosciences and Elutia

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

The idea behind Arcus Biosciences and Elutia Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.