Correlation Between Eli Lilly and Vericel Corp

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

Diversification Opportunities for Eli Lilly and Vericel Corp

-0.41

Correlation Coefficient

Eli Lilly  Vericel Corp

Very good diversification

The 3 months correlation between Eli and Vericel is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Vericel Corp Ord in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vericel Corp Ord 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 Vericel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vericel Corp Ord has no effect on the direction of Eli Lilly i.e., Eli Lilly and Vericel Corp go up and down completely randomly.

Pair Corralation between Eli Lilly and Vericel Corp

Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.8 times more return on investment than Vericel Corp. However, Eli Lilly and is 1.25 times less risky than Vericel Corp. It trades about 0.06 of its potential returns per unit of risk. Vericel Corp Ord is currently generating about -0.12 per unit of risk. If you would invest  78,182  in Eli Lilly and on December 27, 2024 and sell it today you would earn a total of  4,494  from holding Eli Lilly and or generate 5.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Eli Lilly and  vs.  Vericel Corp Ord

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 4 (%) 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.

Vericel Corp Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vericel Corp Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Eli Lilly and Vericel Corp

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

The idea behind Eli Lilly and and Vericel Corp Ord 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.