Correlation Between Eli Lilly and Scynexis
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Scynexis 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 Scynexis 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 Scynexis, you can compare the effects of market volatilities on Eli Lilly and Scynexis 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 Scynexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Scynexis.
Diversification Opportunities for Eli Lilly and Scynexis
Very poor diversification
The 3 months correlation between Eli and Scynexis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Scynexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scynexis 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 Scynexis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scynexis has no effect on the direction of Eli Lilly i.e., Eli Lilly and Scynexis go up and down completely randomly.
Pair Corralation between Eli Lilly and Scynexis
Considering the 90-day investment horizon Eli Lilly and is expected to under-perform the Scynexis. But the stock apears to be less risky and, when comparing its historical volatility, Eli Lilly and is 1.17 times less risky than Scynexis. The stock trades about -0.12 of its potential returns per unit of risk. The Scynexis is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 135.00 in Scynexis on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Scynexis or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. Scynexis
Performance |
| Timeline |
| Eli Lilly |
| Scynexis |
Eli Lilly and Scynexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Scynexis
The main advantage of trading using opposite Eli Lilly and Scynexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Scynexis 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 Scynexis will offset losses from the drop in Scynexis' long position.| Eli Lilly vs. Pfizer Inc | Eli Lilly vs. RLJ Lodging Trust | Eli Lilly vs. Aquagold International | Eli Lilly vs. Stepstone Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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