Correlation Between Eli Lilly and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Xponential Fitness 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 Eli Lilly and Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eli Lilly and and Xponential Fitness, you can compare the effects of market volatilities on Eli Lilly and Xponential Fitness 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 Eli Lilly with a short position of Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Xponential Fitness.
Diversification Opportunities for Eli Lilly and Xponential Fitness
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eli and Xponential is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness and Eli Lilly 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 Eli Lilly and are associated (or correlated) with Xponential Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xponential Fitness has no effect on the direction of Eli Lilly i.e., Eli Lilly and Xponential Fitness go up and down completely randomly.
Pair Corralation between Eli Lilly and Xponential Fitness
Considering the 90-day investment horizon Eli Lilly is expected to generate 5.35 times less return on investment than Xponential Fitness. But when comparing it to its historical volatility, Eli Lilly and is 12.65 times less risky than Xponential Fitness. It trades about 0.76 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 915.00 in Xponential Fitness on March 22, 2024 and sell it today you would earn a total of 590.00 from holding Xponential Fitness or generate 64.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Eli Lilly and vs. Xponential Fitness
Performance |
Timeline |
Eli Lilly |
Xponential Fitness |
Eli Lilly and Xponential Fitness Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eli Lilly and Xponential Fitness
The main advantage of trading using opposite Eli Lilly and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Xponential Fitness 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 Xponential Fitness will offset losses from the drop in Xponential Fitness' long position.Eli Lilly vs. Nano Dimension | Eli Lilly vs. Advance Auto Parts | Eli Lilly vs. Home Depot | Eli Lilly vs. WEBUY GLOBAL LTD |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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