Correlation Between LILLY and Uber Technologies

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Can any of the company-specific risk be diversified away by investing in both LILLY and Uber Technologies 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 LILLY and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LILLY ELI 275 and Uber Technologies, you can compare the effects of market volatilities on LILLY and Uber Technologies 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 LILLY with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LILLY and Uber Technologies.

Diversification Opportunities for LILLY and Uber Technologies

LILLYUberDiversified AwayLILLYUberDiversified Away100%
-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between LILLY and Uber is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding LILLY ELI 275 and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and 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 LILLY ELI 275 are associated (or correlated) with Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of LILLY i.e., LILLY and Uber Technologies go up and down completely randomly.

Pair Corralation between LILLY and Uber Technologies

Assuming the 90 days trading horizon LILLY ELI 275 is expected to generate 0.12 times more return on investment than Uber Technologies. However, LILLY ELI 275 is 8.15 times less risky than Uber Technologies. It trades about -0.1 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.09 per unit of risk. If you would invest  9,884  in LILLY ELI 275 on October 19, 2024 and sell it today you would lose (154.00) from holding LILLY ELI 275 or give up 1.56% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy86.89%
ValuesDaily Returns

LILLY ELI 275  vs.  Uber Technologies

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -30-25-20-15-10-50
JavaScript chart by amCharts 3.21.15532457BH0 UBER
       Timeline  
LILLY ELI 275 

Risk-Adjusted Performance

0 of 100

 
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Very Weak
Over the last 90 days LILLY ELI 275 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LILLY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15302450233124802497.59898.599
Uber Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Uber Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan6065707580

LILLY and Uber Technologies Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.41-0.21-0.0819-0.0409-0.0020470.03440.07270.150.350.55 1234
JavaScript chart by amCharts 3.21.15532457BH0 UBER
       Returns  

Pair Trading with LILLY and Uber Technologies

The main advantage of trading using opposite LILLY and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LILLY position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.
The idea behind LILLY ELI 275 and Uber Technologies 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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