Correlation Between Bristol Myers and ANI Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and ANI 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 Bristol Myers and ANI Pharmaceuticals 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 ANI Pharmaceuticals, you can compare the effects of market volatilities on Bristol Myers and ANI 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 Bristol Myers with a short position of ANI Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and ANI Pharmaceuticals.
Diversification Opportunities for Bristol Myers and ANI Pharmaceuticals
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bristol and ANI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and ANI Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANI Pharmaceuticals 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 ANI Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANI Pharmaceuticals has no effect on the direction of Bristol Myers i.e., Bristol Myers and ANI Pharmaceuticals go up and down completely randomly.
Pair Corralation between Bristol Myers and ANI Pharmaceuticals
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 1.3 times more return on investment than ANI Pharmaceuticals. However, Bristol Myers is 1.3 times more volatile than ANI Pharmaceuticals. It trades about 0.19 of its potential returns per unit of risk. ANI Pharmaceuticals is currently generating about 0.03 per unit of risk. If you would invest 5,264 in Bristol Myers Squibb on August 28, 2024 and sell it today you would earn a total of 614.00 from holding Bristol Myers Squibb or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. ANI Pharmaceuticals
Performance |
| Timeline |
| Bristol Myers Squibb |
| ANI Pharmaceuticals |
Bristol Myers and ANI Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and ANI Pharmaceuticals
The main advantage of trading using opposite Bristol Myers and ANI Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, ANI 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 ANI Pharmaceuticals will offset losses from the drop in ANI Pharmaceuticals' long position.| Bristol Myers vs. Capricor Therapeutics | Bristol Myers vs. Soleno Therapeutics | Bristol Myers vs. Bio Path Holdings | Bristol Myers vs. Moleculin Biotech |
| ANI Pharmaceuticals vs. Phibro Animal Health | ANI Pharmaceuticals vs. Prestige Brand Holdings | ANI Pharmaceuticals vs. Alkermes Plc | ANI Pharmaceuticals vs. Dr Reddys Laboratories |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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