Correlation Between Olympia Financial and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Olympia Financial 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 Olympia Financial and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympia Financial Group and Eli Lilly and, you can compare the effects of market volatilities on Olympia Financial 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 Olympia Financial with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and Eli Lilly.
Diversification Opportunities for Olympia Financial and Eli Lilly
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Olympia and Eli is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Olympia Financial 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 Olympia Financial Group 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 Olympia Financial i.e., Olympia Financial and Eli Lilly go up and down completely randomly.
Pair Corralation between Olympia Financial and Eli Lilly
Assuming the 90 days trading horizon Olympia Financial Group is expected to generate 0.83 times more return on investment than Eli Lilly. However, Olympia Financial Group is 1.2 times less risky than Eli Lilly. It trades about 0.2 of its potential returns per unit of risk. Eli Lilly and is currently generating about 0.15 per unit of risk. If you would invest 10,242 in Olympia Financial Group on September 26, 2024 and sell it today you would earn a total of 658.00 from holding Olympia Financial Group or generate 6.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Olympia Financial Group vs. Eli Lilly and
Performance |
Timeline |
Olympia Financial |
Eli Lilly |
Olympia Financial and Eli Lilly Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Olympia Financial and Eli Lilly
The main advantage of trading using opposite Olympia Financial and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial 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.Olympia Financial vs. Firm Capital Mortgage | Olympia Financial vs. Atrium Mortgage Investment | Olympia Financial vs. MCAN Mortgage | Olympia Financial vs. Chesswood Group Limited |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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