Correlation Between Eli Lilly and Precision Optics,

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

Diversification Opportunities for Eli Lilly and Precision Optics,

-0.8

Correlation Coefficient

Eli Lilly  Precision Optics,

Pay attention - limited upside

The 3 months correlation between Eli and Precision is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Precision Optics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision Optics, 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 Precision Optics,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision Optics, has no effect on the direction of Eli Lilly i.e., Eli Lilly and Precision Optics, go up and down completely randomly.

Pair Corralation between Eli Lilly and Precision Optics,

Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.61 times more return on investment than Precision Optics,. However, Eli Lilly and is 1.63 times less risky than Precision Optics,. It trades about 0.1 of its potential returns per unit of risk. Precision Optics, is currently generating about 0.0 per unit of risk. If you would invest  32,535  in Eli Lilly and on October 24, 2024 and sell it today you would earn a total of  43,103  from holding Eli Lilly and or generate 132.48% 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.  Precision Optics,

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 sluggish performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Precision Optics,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precision Optics, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, Precision Optics, demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eli Lilly and Precision Optics,

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

The idea behind Eli Lilly and and Precision Optics, 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.

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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.