Correlation Between Eli Lilly and IQVIA Holdings
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and IQVIA Holdings 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 IQVIA Holdings 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 IQVIA Holdings, you can compare the effects of market volatilities on Eli Lilly and IQVIA Holdings 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 IQVIA Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and IQVIA Holdings.
Diversification Opportunities for Eli Lilly and IQVIA Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eli and IQVIA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and IQVIA Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQVIA Holdings 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 IQVIA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQVIA Holdings has no effect on the direction of Eli Lilly i.e., Eli Lilly and IQVIA Holdings go up and down completely randomly.
Pair Corralation between Eli Lilly and IQVIA Holdings
Considering the 90-day investment horizon Eli Lilly and is expected to generate 1.02 times more return on investment than IQVIA Holdings. However, Eli Lilly is 1.02 times more volatile than IQVIA Holdings. It trades about -0.15 of its potential returns per unit of risk. IQVIA Holdings is currently generating about -0.17 per unit of risk. If you would invest 95,495 in Eli Lilly and on August 31, 2024 and sell it today you would lose (16,676) from holding Eli Lilly and or give up 17.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. IQVIA Holdings
Performance |
| Timeline |
| Eli Lilly |
| IQVIA Holdings |
Eli Lilly and IQVIA Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and IQVIA Holdings
The main advantage of trading using opposite Eli Lilly and IQVIA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, IQVIA Holdings 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 IQVIA Holdings will offset losses from the drop in IQVIA Holdings' long position.| Eli Lilly vs. Pfizer Inc | Eli Lilly vs. RLJ Lodging Trust | Eli Lilly vs. Aquagold International | Eli Lilly vs. Stepstone Group |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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