Correlation Between SAB Biotherapeutics and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both SAB Biotherapeutics and Eli Lilly 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 SAB Biotherapeutics and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAB Biotherapeutics and Eli Lilly and, you can compare the effects of market volatilities on SAB Biotherapeutics and Eli Lilly 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 SAB Biotherapeutics with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAB Biotherapeutics and Eli Lilly.
Diversification Opportunities for SAB Biotherapeutics and Eli Lilly
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SAB and Eli is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SAB Biotherapeutics and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and SAB Biotherapeutics 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 SAB Biotherapeutics are associated (or correlated) with Eli Lilly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eli Lilly has no effect on the direction of SAB Biotherapeutics i.e., SAB Biotherapeutics and Eli Lilly go up and down completely randomly.
Pair Corralation between SAB Biotherapeutics and Eli Lilly
Assuming the 90 days horizon SAB Biotherapeutics is expected to generate 9.66 times more return on investment than Eli Lilly. However, SAB Biotherapeutics is 9.66 times more volatile than Eli Lilly and. It trades about 0.14 of its potential returns per unit of risk. Eli Lilly and is currently generating about -0.33 per unit of risk. If you would invest 5.34 in SAB Biotherapeutics on August 23, 2024 and sell it today you would earn a total of 1.35 from holding SAB Biotherapeutics or generate 25.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
SAB Biotherapeutics vs. Eli Lilly and
Performance |
| Timeline |
| SAB Biotherapeutics |
| Eli Lilly |
SAB Biotherapeutics and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAB Biotherapeutics and Eli Lilly
The main advantage of trading using opposite SAB Biotherapeutics and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAB Biotherapeutics position performs unexpectedly, Eli Lilly 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 Eli Lilly will offset losses from the drop in Eli Lilly's long position.| SAB Biotherapeutics vs. Kiora Pharmaceuticals | SAB Biotherapeutics vs. ZyVersa Therapeutics | SAB Biotherapeutics vs. Sonnet Biotherapeutics Holdings | SAB Biotherapeutics vs. Zura Bio Limited |
| Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Small Cap Core | Eli Lilly vs. Freedom Holding Corp | Eli Lilly vs. Gfl Environmental Holdings |
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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