Correlation Between Elanco Animal and Ibio
Can any of the company-specific risk be diversified away by investing in both Elanco Animal and Ibio 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 Elanco Animal and Ibio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elanco Animal Health and Ibio Inc, you can compare the effects of market volatilities on Elanco Animal and Ibio 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 Elanco Animal with a short position of Ibio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elanco Animal and Ibio.
Diversification Opportunities for Elanco Animal and Ibio
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elanco and Ibio is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Elanco Animal Health and Ibio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ibio Inc and Elanco Animal 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 Elanco Animal Health are associated (or correlated) with Ibio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ibio Inc has no effect on the direction of Elanco Animal i.e., Elanco Animal and Ibio go up and down completely randomly.
Pair Corralation between Elanco Animal and Ibio
Given the investment horizon of 90 days Elanco Animal is expected to generate 5.35 times less return on investment than Ibio. But when comparing it to its historical volatility, Elanco Animal Health is 4.14 times less risky than Ibio. It trades about 0.02 of its potential returns per unit of risk. Ibio Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,180 in Ibio Inc on September 3, 2024 and sell it today you would lose (886.00) from holding Ibio Inc or give up 75.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elanco Animal Health vs. Ibio Inc
Performance |
| Timeline |
| Elanco Animal Health |
| Ibio Inc |
Elanco Animal and Ibio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elanco Animal and Ibio
The main advantage of trading using opposite Elanco Animal and Ibio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elanco Animal position performs unexpectedly, Ibio 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 Ibio will offset losses from the drop in Ibio's long position.| Elanco Animal vs. Viatris | Elanco Animal vs. Catalent | Elanco Animal vs. Lantheus Holdings | Elanco Animal vs. Haleon plc |
| Ibio vs. Jaguar Animal Health | Ibio vs. GeoVax Labs | Ibio vs. Ocugen Inc | Ibio vs. Tonix Pharmaceuticals Holding |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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