Correlation Between Durect and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Durect and Eli Lilly 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 Durect and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Durect and Eli Lilly and, you can compare the effects of market volatilities on Durect and Eli Lilly 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 Durect with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Durect and Eli Lilly.
Diversification Opportunities for Durect and Eli Lilly
Good diversification
The 3 months correlation between Durect and Eli is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Durect and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Durect 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 Durect are associated (or correlated) with Eli Lilly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eli Lilly has no effect on the direction of Durect i.e., Durect and Eli Lilly go up and down completely randomly.
Pair Corralation between Durect and Eli Lilly
Given the investment horizon of 90 days Durect is expected to under-perform the Eli Lilly. In addition to that, Durect is 3.17 times more volatile than Eli Lilly and. It trades about -0.02 of its total potential returns per unit of risk. Eli Lilly and is currently generating about 0.14 per unit of volatility. If you would invest 72,595 in Eli Lilly and on November 18, 2024 and sell it today you would earn a total of 11,832 from holding Eli Lilly and or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Durect vs. Eli Lilly and
Performance |
| Timeline |
| Durect |
| Eli Lilly |
Durect and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Durect and Eli Lilly
The main advantage of trading using opposite Durect and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Durect position performs unexpectedly, Eli Lilly 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 Eli Lilly will offset losses from the drop in Eli Lilly's long position.| Durect vs. Shuttle Pharmaceuticals | Durect vs. Organogenesis Holdings | Durect vs. Alpha Teknova | Durect vs. Sonoma Pharmaceuticals |
| Eli Lilly vs. Canopy Growth Corp | Eli Lilly vs. SNDL Inc | Eli Lilly vs. Cronos Group | Eli Lilly vs. Curaleaf Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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