Correlation Between Eli Lilly and Cocrystal Pharma
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Cocrystal Pharma 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 Eli Lilly and Cocrystal Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eli Lilly and and Cocrystal Pharma, you can compare the effects of market volatilities on Eli Lilly and Cocrystal Pharma 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 Eli Lilly with a short position of Cocrystal Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Cocrystal Pharma.
Diversification Opportunities for Eli Lilly and Cocrystal Pharma
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eli and Cocrystal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Cocrystal Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cocrystal Pharma and Eli Lilly 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 Eli Lilly and are associated (or correlated) with Cocrystal Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cocrystal Pharma has no effect on the direction of Eli Lilly i.e., Eli Lilly and Cocrystal Pharma go up and down completely randomly.
Pair Corralation between Eli Lilly and Cocrystal Pharma
Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.72 times more return on investment than Cocrystal Pharma. However, Eli Lilly and is 1.39 times less risky than Cocrystal Pharma. It trades about 0.22 of its potential returns per unit of risk. Cocrystal Pharma is currently generating about -0.34 per unit of risk. If you would invest 78,722 in Eli Lilly and on November 9, 2024 and sell it today you would earn a total of 8,315 from holding Eli Lilly and or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. Cocrystal Pharma
Performance |
| Timeline |
| Eli Lilly |
| Cocrystal Pharma |
Eli Lilly and Cocrystal Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Cocrystal Pharma
The main advantage of trading using opposite Eli Lilly and Cocrystal Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Cocrystal Pharma 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 Cocrystal Pharma will offset losses from the drop in Cocrystal Pharma's long position.| Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Bristol Myers Squibb | Eli Lilly vs. AbbVie Inc | Eli Lilly vs. Pfizer Inc |
| Cocrystal Pharma vs. RenovoRx | Cocrystal Pharma vs. Tempest Therapeutics | Cocrystal Pharma vs. Ikena Oncology | Cocrystal Pharma 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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