Correlation Between Eli Lilly and Silence Therapeutics
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Silence 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 Silence 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 Silence Therapeutics PLC, you can compare the effects of market volatilities on Eli Lilly and Silence 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 Silence Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Silence Therapeutics.
Diversification Opportunities for Eli Lilly and Silence Therapeutics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eli and Silence is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Silence Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silence Therapeutics PLC 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 Silence Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silence Therapeutics PLC has no effect on the direction of Eli Lilly i.e., Eli Lilly and Silence Therapeutics go up and down completely randomly.
Pair Corralation between Eli Lilly and Silence Therapeutics
Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.46 times more return on investment than Silence Therapeutics. However, Eli Lilly and is 2.18 times less risky than Silence Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Silence Therapeutics PLC is currently generating about -0.04 per unit of risk. If you would invest 58,446 in Eli Lilly and on September 2, 2024 and sell it today you would earn a total of 21,089 from holding Eli Lilly and or generate 36.08% 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. Silence Therapeutics PLC
Performance |
| Timeline |
| Eli Lilly |
| Silence Therapeutics PLC |
Eli Lilly and Silence Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Silence Therapeutics
The main advantage of trading using opposite Eli Lilly and Silence Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Silence 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 Silence Therapeutics will offset losses from the drop in Silence Therapeutics' long position.| Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Bristol Myers Squibb | Eli Lilly vs. AbbVie Inc | Eli Lilly vs. Pfizer Inc |
| Silence Therapeutics vs. Tff Pharmaceuticals | Silence Therapeutics vs. Eliem Therapeutics | Silence Therapeutics vs. Inhibrx | Silence Therapeutics vs. Enliven 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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