Correlation Between Eli Lilly and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on Eli Lilly and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and AIR PRODCHEMICALS.
Diversification Opportunities for Eli Lilly and AIR PRODCHEMICALS
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eli and AIR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Eli Lilly i.e., Eli Lilly and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Eli Lilly and AIR PRODCHEMICALS
Assuming the 90 days trading horizon Eli Lilly and is expected to under-perform the AIR PRODCHEMICALS. In addition to that, Eli Lilly is 2.81 times more volatile than AIR PRODCHEMICALS. It trades about -0.12 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.29 per unit of volatility. If you would invest 29,520 in AIR PRODCHEMICALS on August 30, 2024 and sell it today you would earn a total of 2,350 from holding AIR PRODCHEMICALS or generate 7.96% 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. AIR PRODCHEMICALS
Performance |
| Timeline |
| Eli Lilly |
| AIR PRODCHEMICALS |
Eli Lilly and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and AIR PRODCHEMICALS
The main advantage of trading using opposite Eli Lilly and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Eli Lilly vs. Hanison Construction Holdings | Eli Lilly vs. Granite Construction | Eli Lilly vs. AIR PRODCHEMICALS | Eli Lilly vs. CHINA TONTINE WINES |
| AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Apple Inc | AIR PRODCHEMICALS vs. Superior Plus Corp | AIR PRODCHEMICALS vs. SIVERS SEMICONDUCTORS AB |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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