Correlation Between Eli Lilly and JPMIF Bond

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

Diversification Opportunities for Eli Lilly and JPMIF Bond

-0.62

Correlation Coefficient

Eli Lilly  JPMIF Bond

Excellent diversification

The 3 months correlation between Eli and JPMIF is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and JPMIF Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMIF Bond Fund 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 JPMIF Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMIF Bond Fund has no effect on the direction of Eli Lilly i.e., Eli Lilly and JPMIF Bond go up and down completely randomly.

Pair Corralation between Eli Lilly and JPMIF Bond

Considering the 90-day investment horizon Eli Lilly and is expected to under-perform the JPMIF Bond. In addition to that, Eli Lilly is 5.14 times more volatile than JPMIF Bond Fund. It trades about -0.05 of its total potential returns per unit of risk. JPMIF Bond Fund is currently generating about 0.09 per unit of volatility. If you would invest  21,739  in JPMIF Bond Fund on October 4, 2024 and sell it today you would earn a total of  1,061  from holding JPMIF Bond Fund or generate 4.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Eli Lilly and  vs.  JPMIF Bond Fund

Eli Lilly

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eli Lilly and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

JPMIF Bond Fund

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JPMIF Bond Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, JPMIF Bond is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Eli Lilly and JPMIF Bond

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

The idea behind Eli Lilly and and JPMIF Bond Fund 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.