Correlation Between Bristol Myers and Aytu BioScience
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Aytu BioScience 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 Aytu BioScience 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 Aytu BioScience, you can compare the effects of market volatilities on Bristol Myers and Aytu BioScience 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 Aytu BioScience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Aytu BioScience.
Diversification Opportunities for Bristol Myers and Aytu BioScience
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and Aytu is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Aytu BioScience in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aytu BioScience 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 Aytu BioScience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aytu BioScience has no effect on the direction of Bristol Myers i.e., Bristol Myers and Aytu BioScience go up and down completely randomly.
Pair Corralation between Bristol Myers and Aytu BioScience
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.59 times more return on investment than Aytu BioScience. However, Bristol Myers Squibb is 1.7 times less risky than Aytu BioScience. It trades about 0.12 of its potential returns per unit of risk. Aytu BioScience is currently generating about -0.16 per unit of risk. If you would invest 5,577 in Bristol Myers Squibb on September 1, 2024 and sell it today you would earn a total of 345.00 from holding Bristol Myers Squibb or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Aytu BioScience
Performance |
| Timeline |
| Bristol Myers Squibb |
| Aytu BioScience |
Bristol Myers and Aytu BioScience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Aytu BioScience
The main advantage of trading using opposite Bristol Myers and Aytu BioScience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Aytu BioScience 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 Aytu BioScience will offset losses from the drop in Aytu BioScience's long position.| Bristol Myers vs. Crinetics Pharmaceuticals | Bristol Myers vs. Enanta Pharmaceuticals | Bristol Myers vs. Amicus Therapeutics | Bristol Myers vs. Connect Biopharma Holdings |
| Aytu BioScience vs. Aquestive Therapeutics | Aytu BioScience vs. Evoke Pharma | Aytu BioScience vs. Shionogi Co Ltd | Aytu BioScience vs. Sunshine Biopharma |
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 Stocks Directory module to find actively traded stocks across global markets.
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