Correlation Between Elanco Animal and Phibro Animal
Can any of the company-specific risk be diversified away by investing in both Elanco Animal and Phibro 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 Elanco Animal and Phibro Animal 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 Phibro Animal Health, you can compare the effects of market volatilities on Elanco Animal and Phibro 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 Elanco Animal with a short position of Phibro Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elanco Animal and Phibro Animal.
Diversification Opportunities for Elanco Animal and Phibro Animal
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elanco and Phibro is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Elanco Animal Health and Phibro Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phibro Animal Health 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 Phibro Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phibro Animal Health has no effect on the direction of Elanco Animal i.e., Elanco Animal and Phibro Animal go up and down completely randomly.
Pair Corralation between Elanco Animal and Phibro Animal
Given the investment horizon of 90 days Elanco Animal Health is expected to generate 1.38 times more return on investment than Phibro Animal. However, Elanco Animal is 1.38 times more volatile than Phibro Animal Health. It trades about 0.05 of its potential returns per unit of risk. Phibro Animal Health is currently generating about 0.01 per unit of risk. If you would invest 1,278 in Elanco Animal Health on August 31, 2024 and sell it today you would earn a total of 35.00 from holding Elanco Animal Health or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elanco Animal Health vs. Phibro Animal Health
Performance |
| Timeline |
| Elanco Animal Health |
| Phibro Animal Health |
Elanco Animal and Phibro Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elanco Animal and Phibro Animal
The main advantage of trading using opposite Elanco Animal and Phibro Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elanco Animal position performs unexpectedly, Phibro 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 Phibro Animal will offset losses from the drop in Phibro Animal's long position.| Elanco Animal vs. Bausch Health Companies | Elanco Animal vs. Haleon plc | Elanco Animal vs. Intracellular Th |
| Phibro Animal vs. Bausch Health Companies | Phibro Animal vs. Haleon plc | Phibro Animal vs. Intracellular Th |
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 CEOs Directory module to screen CEOs from public companies around the world.
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