Correlation Between Emergent Biosolutions and Elanco Animal
Can any of the company-specific risk be diversified away by investing in both Emergent Biosolutions 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 Emergent Biosolutions and Elanco Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emergent Biosolutions and Elanco Animal Health, you can compare the effects of market volatilities on Emergent Biosolutions 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 Emergent Biosolutions with a short position of Elanco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Biosolutions and Elanco Animal.
Diversification Opportunities for Emergent Biosolutions and Elanco Animal
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Emergent and Elanco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Biosolutions 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 Emergent Biosolutions 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 Emergent Biosolutions 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 Emergent Biosolutions i.e., Emergent Biosolutions and Elanco Animal go up and down completely randomly.
Pair Corralation between Emergent Biosolutions and Elanco Animal
Considering the 90-day investment horizon Emergent Biosolutions is expected to generate 1.08 times less return on investment than Elanco Animal. In addition to that, Emergent Biosolutions is 2.0 times more volatile than Elanco Animal Health. It trades about 0.1 of its total potential returns per unit of risk. Elanco Animal Health is currently generating about 0.21 per unit of volatility. If you would invest 1,468 in Elanco Animal Health on July 20, 2025 and sell it today you would earn a total of 674.00 from holding Elanco Animal Health or generate 45.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Biosolutions vs. Elanco Animal Health
Performance |
| Timeline |
| Emergent Biosolutions |
| Elanco Animal Health |
Emergent Biosolutions and Elanco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emergent Biosolutions and Elanco Animal
The main advantage of trading using opposite Emergent Biosolutions and Elanco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Biosolutions 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.| Emergent Biosolutions vs. Organogenesis Holdings | Emergent Biosolutions vs. Esperion Therapeutics | Emergent Biosolutions vs. Rigel Pharmaceuticals | Emergent Biosolutions vs. SIGA Technologies |
| Elanco Animal vs. Dr Reddys Laboratories | Elanco Animal vs. Qiagen NV | Elanco Animal vs. Biomarin Pharmaceutical | Elanco Animal vs. Viatris |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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