Correlation Between Eli Lilly and Xilio Development
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Xilio Development 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 Xilio Development 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 Xilio Development, you can compare the effects of market volatilities on Eli Lilly and Xilio Development 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 Xilio Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Xilio Development.
Diversification Opportunities for Eli Lilly and Xilio Development
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eli and Xilio is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Xilio Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilio Development 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 Xilio Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilio Development has no effect on the direction of Eli Lilly i.e., Eli Lilly and Xilio Development go up and down completely randomly.
Pair Corralation between Eli Lilly and Xilio Development
Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.32 times more return on investment than Xilio Development. However, Eli Lilly and is 3.08 times less risky than Xilio Development. It trades about -0.12 of its potential returns per unit of risk. Xilio Development is currently generating about -0.15 per unit of risk. If you would invest 84,543 in Eli Lilly and on August 31, 2024 and sell it today you would lose (5,724) from holding Eli Lilly and or give up 6.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. Xilio Development
Performance |
| Timeline |
| Eli Lilly |
| Xilio Development |
Eli Lilly and Xilio Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Xilio Development
The main advantage of trading using opposite Eli Lilly and Xilio Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Xilio Development 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 Xilio Development will offset losses from the drop in Xilio Development's long position.| Eli Lilly vs. Pfizer Inc | Eli Lilly vs. RLJ Lodging Trust | Eli Lilly vs. Aquagold International | Eli Lilly vs. Stepstone Group |
| Xilio Development vs. Connect Biopharma Holdings | Xilio Development vs. Tyra Biosciences | Xilio Development vs. RAPT Therapeutics | Xilio Development vs. Mineralys Therapeutics, Common |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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