Correlation Between 23Andme Holding and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both 23Andme Holding 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 23Andme Holding and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 23Andme Holding Co and Eli Lilly and, you can compare the effects of market volatilities on 23Andme Holding 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 23Andme Holding with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of 23Andme Holding and Eli Lilly.
Diversification Opportunities for 23Andme Holding and Eli Lilly
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 23Andme and Eli is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding 23Andme Holding Co and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and 23Andme Holding 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 23Andme Holding Co 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 23Andme Holding i.e., 23Andme Holding and Eli Lilly go up and down completely randomly.
Pair Corralation between 23Andme Holding and Eli Lilly
Allowing for the 90-day total investment horizon 23Andme Holding Co is expected to generate 3.05 times more return on investment than Eli Lilly. However, 23Andme Holding is 3.05 times more volatile than Eli Lilly and. It trades about 0.13 of its potential returns per unit of risk. Eli Lilly and is currently generating about 0.01 per unit of risk. If you would invest 283.00 in 23Andme Holding Co on October 19, 2024 and sell it today you would earn a total of 78.00 from holding 23Andme Holding Co or generate 27.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
23Andme Holding Co vs. Eli Lilly and
Performance |
| Timeline |
| 23Andme Holding |
| Eli Lilly |
23Andme Holding and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 23Andme Holding and Eli Lilly
The main advantage of trading using opposite 23Andme Holding and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 23Andme Holding 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.| 23Andme Holding vs. IDEXX Laboratories | 23Andme Holding vs. Twist Bioscience Corp | 23Andme Holding vs. Guardant Health | 23Andme Holding vs. Agilent Technologies |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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