Correlation Between Eli Lilly and Maravai Lifesciences

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

Diversification Opportunities for Eli Lilly and Maravai Lifesciences

0.78

Correlation Coefficient

Eli Lilly  Maravai Lifesciences

Poor diversification

The 3 months correlation between Eli and Maravai is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Maravai Lifesciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maravai Lifesciences 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 Maravai Lifesciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maravai Lifesciences has no effect on the direction of Eli Lilly i.e., Eli Lilly and Maravai Lifesciences go up and down completely randomly.

Pair Corralation between Eli Lilly and Maravai Lifesciences

Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.38 times more return on investment than Maravai Lifesciences. However, Eli Lilly and is 2.62 times less risky than Maravai Lifesciences. It trades about -0.06 of its potential returns per unit of risk. Maravai Lifesciences Holdings is currently generating about -0.05 per unit of risk. If you would invest  87,561  in Eli Lilly and on October 21, 2024 and sell it today you would lose (14,989) from holding Eli Lilly and or give up 17.12% of portfolio value over 90 days.

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

Eli Lilly and  vs.  Maravai Lifesciences Holdings

Eli Lilly

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eli Lilly and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Maravai Lifesciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maravai Lifesciences Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Eli Lilly and Maravai Lifesciences

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

The idea behind Eli Lilly and and Maravai Lifesciences Holdings 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..