Correlation Between Eli Lilly and Viemed Healthcare
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare, you can compare the effects of market volatilities on Eli Lilly and Viemed Healthcare 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 Viemed Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Viemed Healthcare.
Diversification Opportunities for Eli Lilly and Viemed Healthcare
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eli and Viemed is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Viemed Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viemed Healthcare 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 Viemed Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viemed Healthcare has no effect on the direction of Eli Lilly i.e., Eli Lilly and Viemed Healthcare go up and down completely randomly.
Pair Corralation between Eli Lilly and Viemed Healthcare
Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.73 times more return on investment than Viemed Healthcare. However, Eli Lilly and is 1.37 times less risky than Viemed Healthcare. It trades about 0.09 of its potential returns per unit of risk. Viemed Healthcare is currently generating about -0.01 per unit of risk. If you would invest 42,225 in Eli Lilly and on August 27, 2024 and sell it today you would earn a total of 32,576 from holding Eli Lilly and or generate 77.15% 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. Viemed Healthcare
Performance |
| Timeline |
| Eli Lilly |
| Viemed Healthcare |
Eli Lilly and Viemed Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and Viemed Healthcare
The main advantage of trading using opposite Eli Lilly and Viemed Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Viemed Healthcare 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 Viemed Healthcare will offset losses from the drop in Viemed Healthcare's long position.| Eli Lilly vs. Capricor Therapeutics | Eli Lilly vs. Soleno Therapeutics | Eli Lilly vs. Bio Path Holdings | Eli Lilly vs. Moleculin Biotech |
| Viemed Healthcare vs. Heartbeam | Viemed Healthcare vs. EUDA Health Holdings | Viemed Healthcare vs. Nutex Health | Viemed Healthcare vs. Healthcare Triangle |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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