Correlation Between Eli Lilly and Rhinebeck Bancorp

Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Rhinebeck Bancorp 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 Rhinebeck Bancorp 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 Rhinebeck Bancorp, you can compare the effects of market volatilities on Eli Lilly and Rhinebeck Bancorp 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 Rhinebeck Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Rhinebeck Bancorp.

Diversification Opportunities for Eli Lilly and Rhinebeck Bancorp

-0.79

Correlation Coefficient

Eli Lilly  Rhinebeck Bancorp

Pay attention - limited upside

The 3 months correlation between Eli and Rhinebeck is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Rhinebeck Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rhinebeck Bancorp 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 Rhinebeck Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rhinebeck Bancorp has no effect on the direction of Eli Lilly i.e., Eli Lilly and Rhinebeck Bancorp go up and down completely randomly.

Pair Corralation between Eli Lilly and Rhinebeck Bancorp

Considering the 90-day investment horizon Eli Lilly and is expected to generate 1.05 times more return on investment than Rhinebeck Bancorp. However, Eli Lilly is 1.05 times more volatile than Rhinebeck Bancorp. It trades about 0.31 of its potential returns per unit of risk. Rhinebeck Bancorp is currently generating about -0.27 per unit of risk. If you would invest  71,064  in Eli Lilly and on August 22, 2025 and sell it today you would earn a total of  34,114  from holding Eli Lilly and or generate 48.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Eli Lilly and  vs.  Rhinebeck Bancorp

Eli Lilly

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Eli Lilly and are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish essential indicators, Eli Lilly showed solid returns over the last few months and may actually be approaching a breakup point.

Rhinebeck Bancorp

Risk-Adjusted Performance

Weakest

Over the last 90 days Rhinebeck Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain somewhat strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Eli Lilly and Rhinebeck Bancorp

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

The idea behind Eli Lilly and and Rhinebeck Bancorp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.