Correlation Between Intracellular and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both Intracellular 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 Intracellular and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intracellular Th and Elanco Animal Health, you can compare the effects of market volatilities on Intracellular 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 Intracellular with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intracellular and Elanco Animal.
Diversification Opportunities for Intracellular and Elanco Animal
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intracellular and Elanco is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Intracellular Th 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 Intracellular 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 Intracellular Th 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 Intracellular i.e., Intracellular and Elanco Animal go up and down completely randomly.
Pair Corralation between Intracellular and Elanco Animal
Given the investment horizon of 90 days Intracellular Th is expected to generate 0.83 times more return on investment than Elanco Animal. However, Intracellular Th is 1.2 times less risky than Elanco Animal. It trades about 0.05 of its potential returns per unit of risk. Elanco Animal Health is currently generating about 0.02 per unit of risk. If you would invest 5,269 in Intracellular Th on September 2, 2024 and sell it today you would earn a total of 3,296 from holding Intracellular Th or generate 62.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intracellular Th vs. Elanco Animal Health
Performance |
| Timeline |
| Intracellular Th |
| Elanco Animal Health |
Intracellular and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intracellular and Elanco Animal
The main advantage of trading using opposite Intracellular and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intracellular 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.| Intracellular vs. Alkermes Plc | Intracellular vs. Ironwood Pharmaceuticals | Intracellular vs. Pacira BioSciences, | Intracellular vs. Collegium Pharmaceutical |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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