Correlation Between Eli Lilly and Value Grupo

Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Value Grupo 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 Value Grupo 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 Value Grupo Financiero, you can compare the effects of market volatilities on Eli Lilly and Value Grupo 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 Value Grupo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Value Grupo.

Diversification Opportunities for Eli Lilly and Value Grupo

0.03

Correlation Coefficient

Eli Lilly  Value Grupo

Significant diversification

The 3 months correlation between Eli and Value is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Value Grupo Financiero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Grupo Financiero 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 Value Grupo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Grupo Financiero has no effect on the direction of Eli Lilly i.e., Eli Lilly and Value Grupo go up and down completely randomly.

Pair Corralation between Eli Lilly and Value Grupo

Assuming the 90 days trading horizon Eli Lilly and is expected to generate 0.6 times more return on investment than Value Grupo. However, Eli Lilly and is 1.68 times less risky than Value Grupo. It trades about 0.09 of its potential returns per unit of risk. Value Grupo Financiero is currently generating about 0.0 per unit of risk. If you would invest  698,947  in Eli Lilly and on September 23, 2024 and sell it today you would earn a total of  843,253  from holding Eli Lilly and or generate 120.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Eli Lilly and  vs.  Value Grupo Financiero

Eli Lilly

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eli Lilly and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Value Grupo Financiero

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Value Grupo Financiero has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Value Grupo is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Eli Lilly and Value Grupo

The main advantage of trading using opposite Eli Lilly and Value Grupo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Value Grupo 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 Value Grupo will offset losses from the drop in Value Grupo's long position.

The idea behind Eli Lilly and and Value Grupo Financiero pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.