Correlation Between Eledon Pharmaceuticals and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Eledon Pharmaceuticals 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 Eledon Pharmaceuticals and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eledon Pharmaceuticals and Eli Lilly and, you can compare the effects of market volatilities on Eledon Pharmaceuticals 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 Eledon Pharmaceuticals with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eledon Pharmaceuticals and Eli Lilly.
Diversification Opportunities for Eledon Pharmaceuticals and Eli Lilly
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eledon and Eli is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Eledon Pharmaceuticals and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Eledon 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 Eledon Pharmaceuticals 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 Eledon Pharmaceuticals i.e., Eledon Pharmaceuticals and Eli Lilly go up and down completely randomly.
Pair Corralation between Eledon Pharmaceuticals and Eli Lilly
Given the investment horizon of 90 days Eledon Pharmaceuticals is expected to generate 2.64 times more return on investment than Eli Lilly. However, Eledon Pharmaceuticals is 2.64 times more volatile than Eli Lilly and. It trades about 0.23 of its potential returns per unit of risk. Eli Lilly and is currently generating about -0.23 per unit of risk. If you would invest 249.00 in Eledon Pharmaceuticals on August 26, 2024 and sell it today you would earn a total of 152.00 from holding Eledon Pharmaceuticals or generate 61.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eledon Pharmaceuticals vs. Eli Lilly and
Performance |
| Timeline |
| Eledon Pharmaceuticals |
| Eli Lilly |
Eledon Pharmaceuticals and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eledon Pharmaceuticals and Eli Lilly
The main advantage of trading using opposite Eledon Pharmaceuticals and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eledon Pharmaceuticals 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.| Eledon Pharmaceuticals vs. Inozyme Pharma | Eledon Pharmaceuticals vs. Day One Biopharmaceuticals | Eledon Pharmaceuticals vs. Terns Pharmaceuticals | Eledon Pharmaceuticals vs. Hookipa Pharma |
| Eli Lilly vs. Capricor Therapeutics | Eli Lilly vs. Soleno Therapeutics | Eli Lilly vs. Bio Path Holdings | Eli Lilly vs. Moleculin Biotech |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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