Correlation Between Bristol Myers and Carmell Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Carmell 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 Carmell 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 Carmell Therapeutics, you can compare the effects of market volatilities on Bristol Myers and Carmell 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 Carmell Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Carmell Therapeutics.
Diversification Opportunities for Bristol Myers and Carmell Therapeutics
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and Carmell is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Carmell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmell 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 Carmell Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmell Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and Carmell Therapeutics go up and down completely randomly.
Pair Corralation between Bristol Myers and Carmell Therapeutics
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.18 times more return on investment than Carmell Therapeutics. However, Bristol Myers Squibb is 5.45 times less risky than Carmell Therapeutics. It trades about 0.2 of its potential returns per unit of risk. Carmell Therapeutics is currently generating about -0.81 per unit of risk. If you would invest 5,266 in Bristol Myers Squibb on August 31, 2024 and sell it today you would earn a total of 661.00 from holding Bristol Myers Squibb or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 18.18% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Carmell Therapeutics
Performance |
| Timeline |
| Bristol Myers Squibb |
| Carmell Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Bristol Myers and Carmell Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Carmell Therapeutics
The main advantage of trading using opposite Bristol Myers and Carmell Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Carmell 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 Carmell Therapeutics will offset losses from the drop in Carmell Therapeutics' long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Carmell Therapeutics vs. ZyVersa Therapeutics | Carmell Therapeutics vs. Sonnet Biotherapeutics Holdings | Carmell Therapeutics vs. Revelation Biosciences | Carmell Therapeutics vs. Quoin Pharmaceuticals Ltd |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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