Correlation Between BridgeBio Pharma and Mustang Bio
Can any of the company-specific risk be diversified away by investing in both BridgeBio Pharma and Mustang Bio 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 BridgeBio Pharma and Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BridgeBio Pharma and Mustang Bio, you can compare the effects of market volatilities on BridgeBio Pharma and Mustang Bio 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 BridgeBio Pharma with a short position of Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of BridgeBio Pharma and Mustang Bio.
Diversification Opportunities for BridgeBio Pharma and Mustang Bio
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BridgeBio and Mustang is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BridgeBio Pharma and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio and BridgeBio Pharma 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 BridgeBio Pharma are associated (or correlated) with Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of BridgeBio Pharma i.e., BridgeBio Pharma and Mustang Bio go up and down completely randomly.
Pair Corralation between BridgeBio Pharma and Mustang Bio
Given the investment horizon of 90 days BridgeBio Pharma is expected to under-perform the Mustang Bio. But the stock apears to be less risky and, when comparing its historical volatility, BridgeBio Pharma is 8.78 times less risky than Mustang Bio. The stock trades about -0.01 of its potential returns per unit of risk. The Mustang Bio is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 154.00 in Mustang Bio on September 3, 2024 and sell it today you would lose (135.00) from holding Mustang Bio or give up 87.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BridgeBio Pharma vs. Mustang Bio
Performance |
| Timeline |
| BridgeBio Pharma |
| Mustang Bio |
BridgeBio Pharma and Mustang Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BridgeBio Pharma and Mustang Bio
The main advantage of trading using opposite BridgeBio Pharma and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BridgeBio Pharma position performs unexpectedly, Mustang Bio 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.| BridgeBio Pharma vs. Blueprint Medicines Corp | BridgeBio Pharma vs. Amylyx Pharmaceuticals | BridgeBio Pharma vs. Day One Biopharmaceuticals | BridgeBio Pharma vs. Terns Pharmaceuticals |
| Mustang Bio vs. Checkpoint Therapeutics | Mustang Bio vs. Reviva Pharmaceuticals Holdings | Mustang Bio vs. Fortress Biotech Pref | Mustang Bio vs. Kodiak Sciences |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |