Correlation Between Bristol Myers and Applied Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Applied Therapeutics 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 Applied Therapeutics 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 Applied Therapeutics, you can compare the effects of market volatilities on Bristol Myers and Applied Therapeutics 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 Applied Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Applied Therapeutics.
Diversification Opportunities for Bristol Myers and Applied Therapeutics
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bristol and Applied is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Applied Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Therapeutics 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 Applied Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and Applied Therapeutics go up and down completely randomly.
Pair Corralation between Bristol Myers and Applied Therapeutics
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.33 times more return on investment than Applied Therapeutics. However, Bristol Myers Squibb is 3.03 times less risky than Applied Therapeutics. It trades about -0.11 of its potential returns per unit of risk. Applied Therapeutics is currently generating about -0.05 per unit of risk. If you would invest 6,060 in Bristol Myers Squibb on November 27, 2024 and sell it today you would lose (272.00) from holding Bristol Myers Squibb or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Applied Therapeutics
Performance |
| Timeline |
| Bristol Myers Squibb |
| Applied Therapeutics |
Bristol Myers and Applied Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Applied Therapeutics
The main advantage of trading using opposite Bristol Myers and Applied Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Applied Therapeutics 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 Applied Therapeutics will offset losses from the drop in Applied Therapeutics' long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Applied Therapeutics vs. X4 Pharmaceuticals | Applied Therapeutics vs. Terns Pharmaceuticals | Applied Therapeutics vs. Day One Biopharmaceuticals | Applied Therapeutics vs. Hookipa Pharma |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |