Correlation Between SIGA Technologies and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both SIGA Technologies 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 SIGA Technologies and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIGA Technologies and Elanco Animal Health, you can compare the effects of market volatilities on SIGA Technologies 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 SIGA Technologies with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIGA Technologies and Elanco Animal.
Diversification Opportunities for SIGA Technologies and Elanco Animal
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SIGA and Elanco is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies 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 SIGA Technologies 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 SIGA Technologies 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 SIGA Technologies i.e., SIGA Technologies and Elanco Animal go up and down completely randomly.
Pair Corralation between SIGA Technologies and Elanco Animal
Given the investment horizon of 90 days SIGA Technologies is expected to generate 1.34 times more return on investment than Elanco Animal. However, SIGA Technologies is 1.34 times more volatile than Elanco Animal Health. It trades about 0.02 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 718.00 in SIGA Technologies on August 24, 2024 and sell it today you would lose (70.00) from holding SIGA Technologies or give up 9.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIGA Technologies vs. Elanco Animal Health
Performance |
| Timeline |
| SIGA Technologies |
| Elanco Animal Health |
SIGA Technologies and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIGA Technologies and Elanco Animal
The main advantage of trading using opposite SIGA Technologies and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIGA Technologies 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.| SIGA Technologies vs. Elanco Animal Health | SIGA Technologies vs. Esperion Therapeutics | SIGA Technologies vs. Catalent | SIGA Technologies vs. China Pharma Holdings |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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