Correlation Between Eli Lilly and Jaguar Animal
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Jaguar Animal 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 Jaguar Animal 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 Jaguar Animal Health, you can compare the effects of market volatilities on Eli Lilly and Jaguar Animal 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 Jaguar Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Jaguar Animal.
Diversification Opportunities for Eli Lilly and Jaguar Animal
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eli and Jaguar is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Jaguar Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaguar Animal Health 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 Jaguar Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaguar Animal Health has no effect on the direction of Eli Lilly i.e., Eli Lilly and Jaguar Animal go up and down completely randomly.
Pair Corralation between Eli Lilly and Jaguar Animal
Considering the 90-day investment horizon Eli Lilly and is expected to under-perform the Jaguar Animal. But the stock apears to be less risky and, when comparing its historical volatility, Eli Lilly and is 2.01 times less risky than Jaguar Animal. The stock trades about -0.19 of its potential returns per unit of risk. The Jaguar Animal Health is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 113.00 in Jaguar Animal Health on August 29, 2024 and sell it today you would lose (13.00) from holding Jaguar Animal Health or give up 11.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. Jaguar Animal Health
Performance |
| Timeline |
| Eli Lilly |
| Jaguar Animal Health |
Eli Lilly and Jaguar Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Jaguar Animal
The main advantage of trading using opposite Eli Lilly and Jaguar Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Jaguar Animal 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 Jaguar Animal will offset losses from the drop in Jaguar Animal's long position.| Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Bristol Myers Squibb | Eli Lilly vs. AbbVie Inc | Eli Lilly vs. Pfizer Inc |
| Jaguar Animal vs. Ibio Inc | Jaguar Animal vs. GeoVax Labs | Jaguar Animal vs. Ocugen Inc | Jaguar Animal vs. Zura Bio Limited |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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