Correlation Between Eli Lilly and Genelux Common

Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Genelux Common 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 Genelux Common 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 Genelux Common, you can compare the effects of market volatilities on Eli Lilly and Genelux Common 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 Genelux Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Genelux Common.

Diversification Opportunities for Eli Lilly and Genelux Common

0.73

Correlation Coefficient

Eli Lilly  Genelux Common

Poor diversification

The 3 months correlation between Eli and Genelux is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Genelux Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genelux Common 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 Genelux Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genelux Common has no effect on the direction of Eli Lilly i.e., Eli Lilly and Genelux Common go up and down completely randomly.

Pair Corralation between Eli Lilly and Genelux Common

Considering the 90-day investment horizon Eli Lilly is expected to generate 5.7 times less return on investment than Genelux Common. But when comparing it to its historical volatility, Eli Lilly and is 3.59 times less risky than Genelux Common. It trades about 0.05 of its potential returns per unit of risk. Genelux Common is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  248.00  in Genelux Common on December 27, 2024 and sell it today you would earn a total of  55.00  from holding Genelux Common or generate 22.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Eli Lilly and  vs.  Genelux Common

Eli Lilly

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Eli Lilly and are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Eli Lilly may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Genelux Common

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Genelux Common are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Genelux Common showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eli Lilly and Genelux Common

The main advantage of trading using opposite Eli Lilly and Genelux Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Genelux Common 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 Genelux Common will offset losses from the drop in Genelux Common's long position.

The idea behind Eli Lilly and and Genelux Common pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.