Correlation Between Bright Minds and Eli Lilly
Can any of the company-specific risk be diversified away by investing in both Bright Minds 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 Bright Minds and Eli Lilly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Minds Biosciences and Eli Lilly and, you can compare the effects of market volatilities on Bright Minds 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 Bright Minds with a short position of Eli Lilly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Minds and Eli Lilly.
Diversification Opportunities for Bright Minds and Eli Lilly
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bright and Eli is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bright Minds Biosciences and Eli Lilly and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eli Lilly and Bright Minds 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 Bright Minds Biosciences 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 Bright Minds i.e., Bright Minds and Eli Lilly go up and down completely randomly.
Pair Corralation between Bright Minds and Eli Lilly
Given the investment horizon of 90 days Bright Minds Biosciences is expected to generate 24.81 times more return on investment than Eli Lilly. However, Bright Minds is 24.81 times more volatile than Eli Lilly and. It trades about 0.05 of its potential returns per unit of risk. Eli Lilly and is currently generating about 0.09 per unit of risk. If you would invest 550.00 in Bright Minds Biosciences on August 23, 2024 and sell it today you would earn a total of 2,688 from holding Bright Minds Biosciences or generate 488.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Minds Biosciences vs. Eli Lilly and
Performance |
| Timeline |
| Bright Minds Biosciences |
| Eli Lilly |
Bright Minds and Eli Lilly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Minds and Eli Lilly
The main advantage of trading using opposite Bright Minds and Eli Lilly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Minds 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.| Bright Minds vs. Kiora Pharmaceuticals | Bright Minds vs. ZyVersa Therapeutics | Bright Minds vs. Sonnet Biotherapeutics Holdings | Bright Minds vs. Zura Bio Limited |
| Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Small Cap Core | Eli Lilly vs. Freedom Holding Corp | Eli Lilly vs. Gfl Environmental Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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