Correlation Between Lipocine and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both Lipocine 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 Lipocine and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Elanco Animal Health, you can compare the effects of market volatilities on Lipocine 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 Lipocine with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Elanco Animal.
Diversification Opportunities for Lipocine and Elanco Animal
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lipocine and Elanco is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine 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 Lipocine 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 Lipocine 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 Lipocine i.e., Lipocine and Elanco Animal go up and down completely randomly.
Pair Corralation between Lipocine and Elanco Animal
Given the investment horizon of 90 days Lipocine is expected to under-perform the Elanco Animal. In addition to that, Lipocine is 2.02 times more volatile than Elanco Animal Health. It trades about -0.12 of its total potential returns per unit of risk. Elanco Animal Health is currently generating about 0.08 per unit of volatility. If you would invest 1,264 in Elanco Animal Health on September 1, 2024 and sell it today you would earn a total of 57.00 from holding Elanco Animal Health or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Elanco Animal Health
Performance |
| Timeline |
| Lipocine |
| Elanco Animal Health |
Lipocine and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Elanco Animal
The main advantage of trading using opposite Lipocine and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine 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.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
| Elanco Animal vs. Crinetics Pharmaceuticals | Elanco Animal vs. Enanta Pharmaceuticals | Elanco Animal vs. Amicus Therapeutics | Elanco Animal vs. Connect Biopharma 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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