Correlation Between Platinum Investment and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both Platinum Investment 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 Platinum Investment and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Investment Management and Elanco Animal Health, you can compare the effects of market volatilities on Platinum Investment 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 Platinum Investment with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Elanco Animal.
Diversification Opportunities for Platinum Investment and Elanco Animal
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Platinum and Elanco is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management 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 Platinum Investment 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 Platinum Investment Management 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 Platinum Investment i.e., Platinum Investment and Elanco Animal go up and down completely randomly.
Pair Corralation between Platinum Investment and Elanco Animal
Assuming the 90 days horizon Platinum Investment Management is expected to generate 1.33 times more return on investment than Elanco Animal. However, Platinum Investment is 1.33 times more volatile than Elanco Animal Health. It trades about 0.13 of its potential returns per unit of risk. Elanco Animal Health is currently generating about -0.09 per unit of risk. If you would invest 38.00 in Platinum Investment Management on October 16, 2024 and sell it today you would earn a total of 2.00 from holding Platinum Investment Management or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Investment Management vs. Elanco Animal Health
Performance |
| Timeline |
| Platinum Investment |
| Elanco Animal Health |
Platinum Investment and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Elanco Animal
The main advantage of trading using opposite Platinum Investment and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment 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.| Platinum Investment vs. Molina Healthcare | Platinum Investment vs. NIGHTINGALE HEALTH EO | Platinum Investment vs. Siemens Healthineers AG | Platinum Investment vs. WESANA HEALTH HOLD |
| Elanco Animal vs. Geely Automobile Holdings | Elanco Animal vs. Zoom Video Communications | Elanco Animal vs. Entravision Communications | Elanco Animal vs. Platinum Investment Management |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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