Correlation Between Bristol Myers and Cyclerion Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Cyclerion 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 Cyclerion 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 Cyclerion Therapeutics, you can compare the effects of market volatilities on Bristol Myers and Cyclerion 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 Cyclerion Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Cyclerion Therapeutics.
Diversification Opportunities for Bristol Myers and Cyclerion Therapeutics
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bristol and Cyclerion is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Cyclerion Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclerion 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 Cyclerion Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclerion Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and Cyclerion Therapeutics go up and down completely randomly.
Pair Corralation between Bristol Myers and Cyclerion Therapeutics
Considering the 90-day investment horizon Bristol Myers is expected to generate 89.61 times less return on investment than Cyclerion Therapeutics. But when comparing it to its historical volatility, Bristol Myers Squibb is 8.88 times less risky than Cyclerion Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Cyclerion Therapeutics is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 245.00 in Cyclerion Therapeutics on November 29, 2024 and sell it today you would earn a total of 37.00 from holding Cyclerion Therapeutics or generate 15.1% 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. Cyclerion Therapeutics
Performance |
| Timeline |
| Bristol Myers Squibb |
| Cyclerion Therapeutics |
Bristol Myers and Cyclerion Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Cyclerion Therapeutics
The main advantage of trading using opposite Bristol Myers and Cyclerion Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Cyclerion 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 Cyclerion Therapeutics will offset losses from the drop in Cyclerion Therapeutics' long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Cyclerion Therapeutics vs. Kronos Bio | Cyclerion Therapeutics vs. Larimar Therapeutics | Cyclerion Therapeutics vs. Addex Therapeutics | Cyclerion Therapeutics vs. Achilles 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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