Correlation Between Nasdaq and Harvest Eli

Can any of the company-specific risk be diversified away by investing in both Nasdaq and Harvest Eli 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 Nasdaq and Harvest Eli into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq Inc and Harvest Eli Lilly, you can compare the effects of market volatilities on Nasdaq and Harvest Eli 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 Nasdaq with a short position of Harvest Eli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Harvest Eli.

Diversification Opportunities for Nasdaq and Harvest Eli

0.02

Correlation Coefficient

Nasdaq  Harvest Eli

Significant diversification

The 3 months correlation between Nasdaq and Harvest is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Harvest Eli Lilly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Eli Lilly and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Harvest Eli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Eli Lilly has no effect on the direction of Nasdaq i.e., Nasdaq and Harvest Eli go up and down completely randomly.

Pair Corralation between Nasdaq and Harvest Eli

Given the investment horizon of 90 days Nasdaq is expected to generate 5.85 times less return on investment than Harvest Eli. But when comparing it to its historical volatility, Nasdaq Inc is 1.54 times less risky than Harvest Eli. It trades about 0.01 of its potential returns per unit of risk. Harvest Eli Lilly is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  892.00  in Harvest Eli Lilly on December 28, 2024 and sell it today you would earn a total of  47.00  from holding Harvest Eli Lilly or generate 5.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Nasdaq Inc  vs.  Harvest Eli Lilly

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Harvest Eli Lilly

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Eli Lilly are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical indicators, Harvest Eli may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nasdaq and Harvest Eli

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

The idea behind Nasdaq Inc and Harvest Eli Lilly 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.