Correlation Between Maxim Power and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Maxim Power 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 Maxim Power and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxim Power Corp and Eli Lilly and, you can compare the effects of market volatilities on Maxim Power 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 Maxim Power with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxim Power and Eli Lilly.
Diversification Opportunities for Maxim Power and Eli Lilly
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maxim and Eli is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Maxim Power 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 Maxim Power 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 Maxim Power 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 Maxim Power i.e., Maxim Power and Eli Lilly go up and down completely randomly.
Pair Corralation between Maxim Power and Eli Lilly
Assuming the 90 days trading horizon Maxim Power Corp is expected to generate 1.51 times more return on investment than Eli Lilly. However, Maxim Power is 1.51 times more volatile than Eli Lilly and. It trades about 0.32 of its potential returns per unit of risk. Eli Lilly and is currently generating about -0.11 per unit of risk. If you would invest 347.00 in Maxim Power Corp on October 12, 2024 and sell it today you would earn a total of 261.00 from holding Maxim Power Corp or generate 75.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Maxim Power Corp vs. Eli Lilly and
Performance |
Timeline |
Maxim Power Corp |
Eli Lilly |
Maxim Power and Eli Lilly Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Maxim Power and Eli Lilly
The main advantage of trading using opposite Maxim Power and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxim Power 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.Maxim Power vs. Caldwell Partners International | Maxim Power vs. Mccoy Global | Maxim Power vs. Pulse Seismic | Maxim Power vs. Currency Exchange International |
Eli Lilly vs. Verizon Communications CDR | Eli Lilly vs. Leveljump Healthcare Corp | Eli Lilly vs. Wilmington Capital Management | Eli Lilly vs. Quorum Information Technologies |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |