Correlation Between ANI Pharmaceuticals and Evolus

Can any of the company-specific risk be diversified away by investing in both ANI Pharmaceuticals and Evolus 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 ANI Pharmaceuticals and Evolus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANI Pharmaceuticals and Evolus Inc, you can compare the effects of market volatilities on ANI Pharmaceuticals and Evolus 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 ANI Pharmaceuticals with a short position of Evolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANI Pharmaceuticals and Evolus.

Diversification Opportunities for ANI Pharmaceuticals and Evolus

0.52

Correlation Coefficient

ANI Pharmaceuticals  Evolus

Very weak diversification

The 3 months correlation between ANI and Evolus is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ANI Pharmaceuticals and Evolus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolus Inc and ANI Pharmaceuticals 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 ANI Pharmaceuticals are associated (or correlated) with Evolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolus Inc has no effect on the direction of ANI Pharmaceuticals i.e., ANI Pharmaceuticals and Evolus go up and down completely randomly.

Pair Corralation between ANI Pharmaceuticals and Evolus

Given the investment horizon of 90 days ANI Pharmaceuticals is expected to generate 0.53 times more return on investment than Evolus. However, ANI Pharmaceuticals is 1.89 times less risky than Evolus. It trades about 0.16 of its potential returns per unit of risk. Evolus Inc is currently generating about 0.06 per unit of risk. If you would invest  5,441  in ANI Pharmaceuticals on December 27, 2024 and sell it today you would earn a total of  1,395  from holding ANI Pharmaceuticals or generate 25.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ANI Pharmaceuticals  vs.  Evolus Inc

ANI Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANI Pharmaceuticals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, ANI Pharmaceuticals reported solid returns over the last few months and may actually be approaching a breakup point.

Evolus Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolus Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting essential indicators, Evolus unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANI Pharmaceuticals and Evolus

The main advantage of trading using opposite ANI Pharmaceuticals and Evolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANI Pharmaceuticals position performs unexpectedly, Evolus 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 Evolus will offset losses from the drop in Evolus' long position.

The idea behind ANI Pharmaceuticals and Evolus Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.