Correlation Between Eli Lilly and Lifecore Biomedical
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and Lifecore Biomedical 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 Lifecore Biomedical 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 Lifecore Biomedical, you can compare the effects of market volatilities on Eli Lilly and Lifecore Biomedical 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 Lifecore Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and Lifecore Biomedical.
Diversification Opportunities for Eli Lilly and Lifecore Biomedical
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eli and Lifecore is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical 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 Lifecore Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecore Biomedical has no effect on the direction of Eli Lilly i.e., Eli Lilly and Lifecore Biomedical go up and down completely randomly.
Pair Corralation between Eli Lilly and Lifecore Biomedical
Considering the 90-day investment horizon Eli Lilly and is expected to generate 0.51 times more return on investment than Lifecore Biomedical. However, Eli Lilly and is 1.95 times less risky than Lifecore Biomedical. It trades about 0.06 of its potential returns per unit of risk. Lifecore Biomedical is currently generating about -0.03 per unit of risk. If you would invest 77,251 in Eli Lilly and on December 28, 2024 and sell it today you would earn a total of 4,916 from holding Eli Lilly and or generate 6.36% 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. Lifecore Biomedical
Performance |
Timeline |
Eli Lilly |
Lifecore Biomedical |
Eli Lilly and Lifecore Biomedical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Eli Lilly and Lifecore Biomedical
The main advantage of trading using opposite Eli Lilly and Lifecore Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, Lifecore Biomedical 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 Lifecore Biomedical will offset losses from the drop in Lifecore Biomedical's long position.Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Bristol Myers Squibb | Eli Lilly vs. AbbVie Inc | Eli Lilly vs. Pfizer Inc |
Lifecore Biomedical vs. Shuttle Pharmaceuticals | Lifecore Biomedical vs. Tilray Inc | Lifecore Biomedical vs. Kamada | Lifecore Biomedical vs. Cumberland Pharmaceuticals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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