Correlation Between Eli Lilly and Haw Par
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Haw Par 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 Haw Par 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 Haw Par, you can compare the effects of market volatilities on Eli Lilly and Haw Par 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 Haw Par. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Haw Par.
Diversification Opportunities for Eli Lilly and Haw Par
Pay attention - limited upside
The 3 months correlation between Eli and Haw is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Haw Par in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haw Par 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 Haw Par. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haw Par has no effect on the direction of Eli Lilly i.e., Eli Lilly and Haw Par go up and down completely randomly.
Pair Corralation between Eli Lilly and Haw Par
Considering the 90-day investment horizon Eli Lilly and is expected to under-perform the Haw Par. In addition to that, Eli Lilly is 2.43 times more volatile than Haw Par. It trades about -0.11 of its total potential returns per unit of risk. Haw Par is currently generating about 0.18 per unit of volatility. If you would invest 767.00 in Haw Par on September 13, 2024 and sell it today you would earn a total of 68.00 from holding Haw Par or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. Haw Par
Performance |
| Timeline |
| Eli Lilly |
| Haw Par |
Eli Lilly and Haw Par Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Haw Par
The main advantage of trading using opposite Eli Lilly and Haw Par positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Haw Par 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 Haw Par will offset losses from the drop in Haw Par's long position.| Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Bristol Myers Squibb | Eli Lilly vs. AbbVie Inc | Eli Lilly vs. Pfizer 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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