Correlation Between Deciphera Pharmaceuticals and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both Deciphera Pharmaceuticals 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 Deciphera Pharmaceuticals and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deciphera Pharmaceuticals LLC and Elanco Animal Health, you can compare the effects of market volatilities on Deciphera Pharmaceuticals 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 Deciphera Pharmaceuticals with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deciphera Pharmaceuticals and Elanco Animal.
Diversification Opportunities for Deciphera Pharmaceuticals and Elanco Animal
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deciphera and Elanco is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Deciphera Pharmaceuticals LLC 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 Deciphera Pharmaceuticals 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 Deciphera Pharmaceuticals LLC 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 Deciphera Pharmaceuticals i.e., Deciphera Pharmaceuticals and Elanco Animal go up and down completely randomly.
Pair Corralation between Deciphera Pharmaceuticals and Elanco Animal
Given the investment horizon of 90 days Deciphera Pharmaceuticals LLC is expected to under-perform the Elanco Animal. In addition to that, Deciphera Pharmaceuticals is 1.09 times more volatile than Elanco Animal Health. It trades about -0.01 of its total potential returns per unit of risk. Elanco Animal Health is currently generating about 0.02 per unit of volatility. If you would invest 1,285 in Elanco Animal Health on August 24, 2024 and sell it today you would earn a total of 51.00 from holding Elanco Animal Health or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
Deciphera Pharmaceuticals LLC vs. Elanco Animal Health
Performance |
| Timeline |
| Deciphera Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Elanco Animal Health |
Deciphera Pharmaceuticals and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deciphera Pharmaceuticals and Elanco Animal
The main advantage of trading using opposite Deciphera Pharmaceuticals and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deciphera Pharmaceuticals 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.| Deciphera Pharmaceuticals vs. ANI Pharmaceuticals | Deciphera Pharmaceuticals vs. Phibro Animal Health | Deciphera Pharmaceuticals vs. Prestige Brand Holdings | Deciphera Pharmaceuticals vs. Evotec SE ADR |
| Elanco Animal vs. Viatris | Elanco Animal vs. Catalent | Elanco Animal vs. Lantheus Holdings | Elanco Animal vs. Haleon plc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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