Correlation Between Paltalk and LILLY

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

By analyzing existing cross correlation between Paltalk and LILLY ELI 275, you can compare the effects of market volatilities on Paltalk and 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 Paltalk with a short position of LILLY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paltalk and LILLY.

Diversification Opportunities for Paltalk and LILLY

0.17

Correlation Coefficient

Paltalk  LILLY

Average diversification

The 3 months correlation between Paltalk and LILLY is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Paltalk and LILLY ELI 275 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LILLY ELI 275 and Paltalk 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 Paltalk are associated (or correlated) with LILLY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LILLY ELI 275 has no effect on the direction of Paltalk i.e., Paltalk and LILLY go up and down completely randomly.

Pair Corralation between Paltalk and LILLY

Given the investment horizon of 90 days Paltalk is expected to generate 18.86 times more return on investment than LILLY. However, Paltalk is 18.86 times more volatile than LILLY ELI 275. It trades about 0.04 of its potential returns per unit of risk. LILLY ELI 275 is currently generating about 0.0 per unit of risk. If you would invest  140.00  in Paltalk on September 24, 2024 and sell it today you would earn a total of  28.00  from holding Paltalk or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.12%
Values	Daily Returns

Paltalk  vs.  LILLY ELI 275

Paltalk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paltalk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

LILLY ELI 275

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LILLY ELI 275 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LILLY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Paltalk and LILLY

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

The idea behind Paltalk and LILLY ELI 275 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.