Correlation Between Eli Lilly and NovaBay Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Eli Lilly and NovaBay Pharmaceuticals 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 NovaBay Pharmaceuticals 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 NovaBay Pharmaceuticals, you can compare the effects of market volatilities on Eli Lilly and NovaBay Pharmaceuticals 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 NovaBay Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eli Lilly and NovaBay Pharmaceuticals.
Diversification Opportunities for Eli Lilly and NovaBay Pharmaceuticals
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eli and NovaBay is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Eli Lilly and and NovaBay Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NovaBay Pharmaceuticals 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 NovaBay Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NovaBay Pharmaceuticals has no effect on the direction of Eli Lilly i.e., Eli Lilly and NovaBay Pharmaceuticals go up and down completely randomly.
Pair Corralation between Eli Lilly and NovaBay Pharmaceuticals
Considering the 90-day investment horizon Eli Lilly and is expected to under-perform the NovaBay Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Eli Lilly and is 2.45 times less risky than NovaBay Pharmaceuticals. The stock trades about -0.19 of its potential returns per unit of risk. The NovaBay Pharmaceuticals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 55.00 in NovaBay Pharmaceuticals on August 29, 2024 and sell it today you would earn a total of 6.00 from holding NovaBay Pharmaceuticals or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eli Lilly and vs. NovaBay Pharmaceuticals
Performance |
| Timeline |
| Eli Lilly |
| NovaBay Pharmaceuticals |
Eli Lilly and NovaBay Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eli Lilly and NovaBay Pharmaceuticals
The main advantage of trading using opposite Eli Lilly and NovaBay Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eli Lilly position performs unexpectedly, NovaBay Pharmaceuticals 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 NovaBay Pharmaceuticals will offset losses from the drop in NovaBay Pharmaceuticals' long position.| Eli Lilly vs. Johnson Johnson | Eli Lilly vs. Bristol Myers Squibb | Eli Lilly vs. AbbVie Inc | Eli Lilly vs. Pfizer Inc |
| NovaBay Pharmaceuticals vs. Immix Biopharma | NovaBay Pharmaceuticals vs. Cns Pharmaceuticals | NovaBay Pharmaceuticals vs. Sonnet Biotherapeutics Holdings | NovaBay Pharmaceuticals vs. ZyVersa Therapeutics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |