Correlation Between Patagonia Gold and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Patagonia Gold 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 Patagonia Gold and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patagonia Gold Corp and Eli Lilly and, you can compare the effects of market volatilities on Patagonia Gold 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 Patagonia Gold with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patagonia Gold and Eli Lilly.
Diversification Opportunities for Patagonia Gold and Eli Lilly
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Patagonia and Eli is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Patagonia Gold 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 Patagonia Gold 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 Patagonia Gold 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 Patagonia Gold i.e., Patagonia Gold and Eli Lilly go up and down completely randomly.
Pair Corralation between Patagonia Gold and Eli Lilly
Assuming the 90 days trading horizon Patagonia Gold Corp is expected to under-perform the Eli Lilly. In addition to that, Patagonia Gold is 6.69 times more volatile than Eli Lilly and. It trades about -0.07 of its total potential returns per unit of risk. Eli Lilly and is currently generating about 0.06 per unit of volatility. If you would invest 2,808 in Eli Lilly and on September 24, 2024 and sell it today you would earn a total of 50.00 from holding Eli Lilly and or generate 1.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Patagonia Gold Corp vs. Eli Lilly and
Performance |
Timeline |
Patagonia Gold Corp |
Eli Lilly |
Patagonia Gold and Eli Lilly Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Patagonia Gold and Eli Lilly
The main advantage of trading using opposite Patagonia Gold and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patagonia Gold 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.Patagonia Gold vs. Precipitate Gold Corp | Patagonia Gold vs. Libero Copper Corp | Patagonia Gold vs. Chakana Copper Corp | Patagonia Gold vs. ROKMASTER Resources Corp |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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