Correlation Between Eli Lilly and Corcept Therapeutics
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Corcept Therapeutics 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 Corcept Therapeutics 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 Corcept Therapeutics Incorporated, you can compare the effects of market volatilities on Eli Lilly and Corcept Therapeutics 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 Corcept Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Corcept Therapeutics.
Diversification Opportunities for Eli Lilly and Corcept Therapeutics
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eli and Corcept is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Corcept Therapeutics Incorpora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corcept Therapeutics 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 Corcept Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corcept Therapeutics has no effect on the direction of Eli Lilly i.e., Eli Lilly and Corcept Therapeutics go up and down completely randomly.
Pair Corralation between Eli Lilly and Corcept Therapeutics
Considering the 90-day investment horizon Eli Lilly and is expected to under-perform the Corcept Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Eli Lilly and is 1.29 times less risky than Corcept Therapeutics. The stock trades about -0.21 of its potential returns per unit of risk. The Corcept Therapeutics Incorporated is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 4,821 in Corcept Therapeutics Incorporated on August 30, 2024 and sell it today you would earn a total of 1,039 from holding Corcept Therapeutics Incorporated or generate 21.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. Corcept Therapeutics Incorpora
Performance |
| Timeline |
| Eli Lilly |
| Corcept Therapeutics |
Eli Lilly and Corcept Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Corcept Therapeutics
The main advantage of trading using opposite Eli Lilly and Corcept Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Corcept Therapeutics 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 Corcept Therapeutics will offset losses from the drop in Corcept Therapeutics' long position.| Eli Lilly vs. Emergent Biosolutions | Eli Lilly vs. Bausch Health Companies | Eli Lilly vs. Neurocrine Biosciences | Eli Lilly vs. Teva Pharma Industries |
| Corcept Therapeutics vs. Ideaya Biosciences | Corcept Therapeutics vs. AnaptysBio | Corcept Therapeutics vs. MeiraGTx Holdings PLC | Corcept Therapeutics vs. Keros Therapeutics |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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