Correlation Between Elanco Animal and Marker Therapeutics
Can any of the company-specific risk be diversified away by investing in both Elanco Animal and Marker 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 Elanco Animal and Marker Therapeutics 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 Marker Therapeutics, you can compare the effects of market volatilities on Elanco Animal and Marker 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 Elanco Animal with a short position of Marker Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elanco Animal and Marker Therapeutics.
Diversification Opportunities for Elanco Animal and Marker Therapeutics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elanco and Marker is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Elanco Animal Health and Marker Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marker Therapeutics 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 Marker Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marker Therapeutics has no effect on the direction of Elanco Animal i.e., Elanco Animal and Marker Therapeutics go up and down completely randomly.
Pair Corralation between Elanco Animal and Marker Therapeutics
Given the investment horizon of 90 days Elanco Animal Health is expected to generate 0.49 times more return on investment than Marker Therapeutics. However, Elanco Animal Health is 2.04 times less risky than Marker Therapeutics. It trades about 0.09 of its potential returns per unit of risk. Marker Therapeutics is currently generating about 0.03 per unit of risk. If you would invest 1,256 in Elanco Animal Health on September 3, 2024 and sell it today you would earn a total of 65.00 from holding Elanco Animal Health or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elanco Animal Health vs. Marker Therapeutics
Performance |
| Timeline |
| Elanco Animal Health |
| Marker Therapeutics |
Elanco Animal and Marker Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elanco Animal and Marker Therapeutics
The main advantage of trading using opposite Elanco Animal and Marker Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elanco Animal position performs unexpectedly, Marker 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 Marker Therapeutics will offset losses from the drop in Marker Therapeutics' long position.| Elanco Animal vs. Viatris | Elanco Animal vs. Catalent | Elanco Animal vs. Lantheus Holdings | Elanco Animal vs. Haleon plc |
| Marker Therapeutics vs. DiaMedica Therapeutics | Marker Therapeutics vs. Lyra Therapeutics | Marker Therapeutics vs. Centessa Pharmaceuticals 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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