Correlation Between HANSOH PHARMAC and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both HANSOH PHARMAC 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 HANSOH PHARMAC and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HANSOH PHARMAC HD 00001 and Elanco Animal Health, you can compare the effects of market volatilities on HANSOH PHARMAC 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 HANSOH PHARMAC with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of HANSOH PHARMAC and Elanco Animal.
Diversification Opportunities for HANSOH PHARMAC and Elanco Animal
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between HANSOH and Elanco is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding HANSOH PHARMAC HD 00001 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 HANSOH PHARMAC 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 HANSOH PHARMAC HD 00001 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 HANSOH PHARMAC i.e., HANSOH PHARMAC and Elanco Animal go up and down completely randomly.
Pair Corralation between HANSOH PHARMAC and Elanco Animal
Assuming the 90 days horizon HANSOH PHARMAC HD 00001 is expected to under-perform the Elanco Animal. In addition to that, HANSOH PHARMAC is 1.4 times more volatile than Elanco Animal Health. It trades about -0.04 of its total potential returns per unit of risk. Elanco Animal Health is currently generating about 0.0 per unit of volatility. If you would invest 1,152 in Elanco Animal Health on September 24, 2024 and sell it today you would lose (24.00) from holding Elanco Animal Health or give up 2.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
HANSOH PHARMAC HD 00001 vs. Elanco Animal Health
Performance |
Timeline |
HANSOH PHARMAC HD |
Elanco Animal Health |
HANSOH PHARMAC and Elanco Animal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HANSOH PHARMAC and Elanco Animal
The main advantage of trading using opposite HANSOH PHARMAC and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HANSOH PHARMAC 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.HANSOH PHARMAC vs. Merck Company | HANSOH PHARMAC vs. Takeda Pharmaceutical | HANSOH PHARMAC vs. Guangzhou Baiyunshan Pharmaceutical | HANSOH PHARMAC vs. Elanco Animal Health |
Elanco Animal vs. Merck Company | Elanco Animal vs. Takeda Pharmaceutical | Elanco Animal vs. HANSOH PHARMAC HD 00001 | Elanco Animal vs. Guangzhou Baiyunshan Pharmaceutical |
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 Correlations module to find global opportunities by holding instruments from different markets.
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