Correlation Between Excelsior Mining and Eli Lilly

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Can any of the company-specific risk be diversified away by investing in both Excelsior Mining 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 Excelsior Mining and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Mining Corp and Eli Lilly and, you can compare the effects of market volatilities on Excelsior Mining 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 Excelsior Mining with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and Eli Lilly.

Diversification Opportunities for Excelsior Mining and Eli Lilly

ExcelsiorEliDiversified AwayExcelsiorEliDiversified Away100%
-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Excelsior and Eli is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Excelsior Mining 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 Excelsior Mining Corp 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 Excelsior Mining i.e., Excelsior Mining and Eli Lilly go up and down completely randomly.

Pair Corralation between Excelsior Mining and Eli Lilly

Assuming the 90 days trading horizon Excelsior Mining Corp is expected to generate 3.84 times more return on investment than Eli Lilly. However, Excelsior Mining is 3.84 times more volatile than Eli Lilly and. It trades about 0.03 of its potential returns per unit of risk. Eli Lilly and is currently generating about -0.1 per unit of risk. If you would invest  18.00  in Excelsior Mining Corp on October 15, 2024 and sell it today you would earn a total of  0.00  from holding Excelsior Mining Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Excelsior Mining Corp  vs.  Eli Lilly and

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-10010
JavaScript chart by amCharts 3.21.15MIN LLY
       Timeline  
Excelsior Mining Corp 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Mining Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Excelsior Mining displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.130.140.150.160.170.180.190.20.21
Eli Lilly 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2728293031323334

Excelsior Mining and Eli Lilly Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-25.52-19.11-12.71-6.30.06.4112.9419.4625.98 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15MIN LLY
       Returns  

Pair Trading with Excelsior Mining and Eli Lilly

The main advantage of trading using opposite Excelsior Mining and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Mining 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.
The idea behind Excelsior Mining Corp and Eli Lilly and 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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