Correlation Between FibraHotel and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both FibraHotel 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 FibraHotel and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Eli Lilly and, you can compare the effects of market volatilities on FibraHotel 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 FibraHotel with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Eli Lilly.
Diversification Opportunities for FibraHotel and Eli Lilly
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FibraHotel and Eli is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and FibraHotel 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 FibraHotel 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 FibraHotel i.e., FibraHotel and Eli Lilly go up and down completely randomly.
Pair Corralation between FibraHotel and Eli Lilly
Assuming the 90 days trading horizon FibraHotel is expected to generate 2.2 times less return on investment than Eli Lilly. In addition to that, FibraHotel is 1.22 times more volatile than Eli Lilly and. It trades about 0.02 of its total potential returns per unit of risk. Eli Lilly and is currently generating about 0.04 per unit of volatility. If you would invest 1,468,909 in Eli Lilly and on September 1, 2024 and sell it today you would earn a total of 149,141 from holding Eli Lilly and or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
FibraHotel vs. Eli Lilly and
Performance |
| Timeline |
| FibraHotel |
| Eli Lilly |
FibraHotel and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Eli Lilly
The main advantage of trading using opposite FibraHotel and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel 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.| FibraHotel vs. GMxico Transportes SAB | FibraHotel vs. Samsung Electronics Co | FibraHotel vs. Micron Technology | FibraHotel vs. CVS Health |
| Eli Lilly vs. Roche Holding AG | Eli Lilly vs. Amgen Inc | Eli Lilly vs. Gilead Sciences | Eli Lilly vs. Biogen Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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