Correlation Between Fluor and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Fluor 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 Fluor and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluor and Eli Lilly and, you can compare the effects of market volatilities on Fluor 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 Fluor with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluor and Eli Lilly.
Diversification Opportunities for Fluor and Eli Lilly
Very good diversification
The 3 months correlation between Fluor and Eli is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fluor and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Fluor 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 Fluor 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 Fluor i.e., Fluor and Eli Lilly go up and down completely randomly.
Pair Corralation between Fluor and Eli Lilly
If you would invest 98,527 in Fluor on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Fluor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Fluor vs. Eli Lilly and
Performance |
| Timeline |
| Fluor |
| Eli Lilly |
Fluor and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluor and Eli Lilly
The main advantage of trading using opposite Fluor and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluor 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.| Fluor vs. CVS Health | Fluor vs. Ameriprise Financial | Fluor vs. McEwen Mining | Fluor vs. Deutsche Bank Aktiengesellschaft |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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