Correlation Between Singapore Telecommunicatio and Eli Lilly

Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio 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 Singapore Telecommunicatio and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Singapore Telecommunications Limited and Eli Lilly and, you can compare the effects of market volatilities on Singapore Telecommunicatio 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 Singapore Telecommunicatio with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Eli Lilly.

Diversification Opportunities for Singapore Telecommunicatio and Eli Lilly

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Correlation Coefficient

Singapore Telecommunicatio  Eli Lilly

Pay attention - limited upside

The 3 months correlation between Singapore and Eli is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Singapore Telecommunicatio 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 Singapore Telecommunications Limited 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 Singapore Telecommunicatio i.e., Singapore Telecommunicatio and Eli Lilly go up and down completely randomly.

Pair Corralation between Singapore Telecommunicatio and Eli Lilly

Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 18.76 times less return on investment than Eli Lilly. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 1.33 times less risky than Eli Lilly. It trades about 0.01 of its potential returns per unit of risk. Eli Lilly and is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  75,300  in Eli Lilly and on October 13, 2024 and sell it today you would earn a total of  1,740  from holding Eli Lilly and or generate 2.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Singapore Telecommunications L  vs.  Eli Lilly and

Singapore Telecommunicatio

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Singapore Telecommunications Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Singapore Telecommunicatio is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

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 latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Singapore Telecommunicatio and Eli Lilly

The main advantage of trading using opposite Singapore Telecommunicatio and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio 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.

The idea behind Singapore Telecommunications Limited and Eli Lilly and 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.