Correlation Between Catalent and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both Catalent and Elanco Animal 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 Catalent and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Catalent and Elanco Animal Health, you can compare the effects of market volatilities on Catalent and Elanco Animal 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 Catalent with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalent and Elanco Animal.
Diversification Opportunities for Catalent and Elanco Animal
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Catalent and Elanco is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Catalent and Elanco Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elanco Animal Health and Catalent 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 Catalent are associated (or correlated) with Elanco Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elanco Animal Health has no effect on the direction of Catalent i.e., Catalent and Elanco Animal go up and down completely randomly.
Pair Corralation between Catalent and Elanco Animal
If you would invest 1,211 in Elanco Animal Health on November 1, 2024 and sell it today you would earn a total of 18.00 from holding Elanco Animal Health or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Catalent vs. Elanco Animal Health
Performance |
| Timeline |
| Catalent |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Elanco Animal Health |
Catalent and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Catalent and Elanco Animal
The main advantage of trading using opposite Catalent and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalent position performs unexpectedly, Elanco Animal 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 Elanco Animal will offset losses from the drop in Elanco Animal's long position.| Catalent vs. IQVIA Holdings | Catalent vs. West Pharmaceutical Services | Catalent vs. Charles River Laboratories | Catalent vs. Bio Rad Laboratories |
| Elanco Animal vs. Viatris | Elanco Animal vs. Lantheus Holdings | Elanco Animal vs. Haleon plc | Elanco Animal vs. Phibro Animal Health |
Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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