Correlation Between Elanco Animal and Shuttle Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Elanco Animal and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals, you can compare the effects of market volatilities on Elanco Animal and Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elanco Animal and Shuttle Pharmaceuticals.
Diversification Opportunities for Elanco Animal and Shuttle Pharmaceuticals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Elanco and Shuttle is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Elanco Animal Health and Shuttle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle Pharmaceuticals has no effect on the direction of Elanco Animal i.e., Elanco Animal and Shuttle Pharmaceuticals go up and down completely randomly.
Pair Corralation between Elanco Animal and Shuttle Pharmaceuticals
Given the investment horizon of 90 days Elanco Animal Health is expected to generate 0.32 times more return on investment than Shuttle Pharmaceuticals. However, Elanco Animal Health is 3.09 times less risky than Shuttle Pharmaceuticals. It trades about -0.05 of its potential returns per unit of risk. Shuttle Pharmaceuticals is currently generating about -0.09 per unit of risk. If you would invest 1,432 in Elanco Animal Health on August 28, 2024 and sell it today you would lose (93.00) from holding Elanco Animal Health or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elanco Animal Health vs. Shuttle Pharmaceuticals
Performance |
| Timeline |
| Elanco Animal Health |
| Shuttle Pharmaceuticals |
Elanco Animal and Shuttle Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elanco Animal and Shuttle Pharmaceuticals
The main advantage of trading using opposite Elanco Animal and Shuttle Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elanco Animal position performs unexpectedly, Shuttle Pharmaceuticals 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 Shuttle Pharmaceuticals will offset losses from the drop in Shuttle Pharmaceuticals' long position.| Elanco Animal vs. Viatris | Elanco Animal vs. Catalent | Elanco Animal vs. Lantheus Holdings | Elanco Animal vs. Haleon plc |
| Shuttle Pharmaceuticals vs. Lifecore Biomedical | Shuttle Pharmaceuticals vs. Catalent | Shuttle Pharmaceuticals vs. Tilray Inc | Shuttle Pharmaceuticals vs. Organogenesis Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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