Correlation Between Bristol Myers and Aldeyra
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Aldeyra 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 and Aldeyra 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 Aldeyra, you can compare the effects of market volatilities on Bristol Myers and Aldeyra 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 with a short position of Aldeyra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Aldeyra.
Diversification Opportunities for Bristol Myers and Aldeyra
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and Aldeyra is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Aldeyra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldeyra and Bristol Myers 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 Aldeyra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldeyra has no effect on the direction of Bristol Myers i.e., Bristol Myers and Aldeyra go up and down completely randomly.
Pair Corralation between Bristol Myers and Aldeyra
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Aldeyra. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 4.02 times less risky than Aldeyra. The stock trades about -0.01 of its potential returns per unit of risk. The Aldeyra is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 643.00 in Aldeyra on September 1, 2024 and sell it today you would lose (153.00) from holding Aldeyra or give up 23.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Aldeyra
Performance |
| Timeline |
| Bristol Myers Squibb |
| Aldeyra |
Bristol Myers and Aldeyra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Aldeyra
The main advantage of trading using opposite Bristol Myers and Aldeyra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Aldeyra 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 Aldeyra will offset losses from the drop in Aldeyra's long position.| Bristol Myers vs. Crinetics Pharmaceuticals | Bristol Myers vs. Enanta Pharmaceuticals | Bristol Myers vs. Amicus Therapeutics | Bristol Myers vs. Connect Biopharma Holdings |
| Aldeyra vs. Tarsus Pharmaceuticals | Aldeyra vs. Travere Therapeutics | Aldeyra vs. Eton Pharmaceuticals | Aldeyra vs. Viridian 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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