Correlation Between Evolus and ANI Pharmaceuticals

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

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

Diversification Opportunities for Evolus and ANI Pharmaceuticals

0.43

Correlation Coefficient

Evolus  ANI Pharmaceuticals

Very weak diversification

The 3 months correlation between Evolus and ANI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Evolus Inc and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals and Evolus 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 Evolus Inc are associated (or correlated) with ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Evolus i.e., Evolus and ANI Pharmaceuticals go up and down completely randomly.

Pair Corralation between Evolus and ANI Pharmaceuticals

Given the investment horizon of 90 days Evolus is expected to generate 1.29 times less return on investment than ANI Pharmaceuticals. In addition to that, Evolus is 1.89 times more volatile than ANI Pharmaceuticals. It trades about 0.07 of its total potential returns per unit of risk. ANI Pharmaceuticals is currently generating about 0.16 per unit of volatility. If you would invest  5,421  in ANI Pharmaceuticals on December 28, 2024 and sell it today you would earn a total of  1,415  from holding ANI Pharmaceuticals or generate 26.1% return on investment over 90 days.

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

Evolus Inc  vs.  ANI Pharmaceuticals

Evolus Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Evolus Inc are ranked lower than 5 (%) 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.

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.

Pair Trading with Evolus and ANI Pharmaceuticals

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

The idea behind Evolus Inc and ANI Pharmaceuticals 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.