Correlation Between Bristol Myers and Capricor Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Capricor 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 Capricor 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 Capricor Therapeutics, you can compare the effects of market volatilities on Bristol Myers and Capricor 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 Capricor Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Capricor Therapeutics.
Diversification Opportunities for Bristol Myers and Capricor Therapeutics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bristol and Capricor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Capricor Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricor 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 Capricor Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricor Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and Capricor Therapeutics go up and down completely randomly.
Pair Corralation between Bristol Myers and Capricor Therapeutics
Considering the 90-day investment horizon Bristol Myers is expected to generate 8.78 times less return on investment than Capricor Therapeutics. But when comparing it to its historical volatility, Bristol Myers Squibb is 3.83 times less risky than Capricor Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Capricor Therapeutics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 420.00 in Capricor Therapeutics on August 27, 2024 and sell it today you would earn a total of 1,442 from holding Capricor Therapeutics or generate 343.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Capricor Therapeutics
Performance |
| Timeline |
| Bristol Myers Squibb |
| Capricor Therapeutics |
Bristol Myers and Capricor Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Capricor Therapeutics
The main advantage of trading using opposite Bristol Myers and Capricor Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Capricor 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 Capricor Therapeutics will offset losses from the drop in Capricor Therapeutics' long position.| Bristol Myers vs. Capricor Therapeutics | Bristol Myers vs. Soleno Therapeutics | Bristol Myers vs. Bio Path Holdings | Bristol Myers vs. Moleculin Biotech |
| Capricor Therapeutics vs. Bio Path Holdings | Capricor Therapeutics vs. NextCure | Capricor Therapeutics vs. Pulmatrix | Capricor Therapeutics vs. Akari Therapeutics PLC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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