Correlation Between Bristol-Myers Squibb and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Eli Lilly 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 Bristol-Myers Squibb and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristol Myers Squibb and Eli Lilly and, you can compare the effects of market volatilities on Bristol-Myers Squibb and Eli Lilly 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 Bristol-Myers Squibb with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Eli Lilly.
Diversification Opportunities for Bristol-Myers Squibb and Eli Lilly
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol-Myers and Eli is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Bristol-Myers Squibb 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 Bristol Myers Squibb are associated (or correlated) with Eli Lilly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eli Lilly has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Eli Lilly go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and Eli Lilly
If you would invest 29,077 in Eli Lilly and on January 26, 2024 and sell it today you would earn a total of 44,143 from holding Eli Lilly and or generate 151.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Eli Lilly and
Performance |
| Timeline |
| Bristol Myers Squibb |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Eli Lilly |
Bristol-Myers Squibb and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and Eli Lilly
The main advantage of trading using opposite Bristol-Myers Squibb and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Eli Lilly 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 Eli Lilly will offset losses from the drop in Eli Lilly's long position.| Bristol-Myers Squibb vs. Novartis AG | Bristol-Myers Squibb vs. Bayer Aktiengesellschaft | Bristol-Myers Squibb vs. Astellas Pharma | Bristol-Myers Squibb vs. Roche Holding AG |
| Eli Lilly vs. Aurora Cannabis | Eli Lilly vs. Shuttle Pharmaceuticals | Eli Lilly vs. Lifecore Biomedical | Eli Lilly vs. Lucy Scientific Discovery |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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