Correlation Between Bristol Myers and Evolus
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Evolus 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 Evolus 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 Evolus Inc, you can compare the effects of market volatilities on Bristol Myers and Evolus 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 Evolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Evolus.
Diversification Opportunities for Bristol Myers and Evolus
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bristol and Evolus is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Evolus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolus Inc 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 Evolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolus Inc has no effect on the direction of Bristol Myers i.e., Bristol Myers and Evolus go up and down completely randomly.
Pair Corralation between Bristol Myers and Evolus
Considering the 90-day investment horizon Bristol Myers is expected to generate 5.18 times less return on investment than Evolus. But when comparing it to its historical volatility, Bristol Myers Squibb is 5.47 times less risky than Evolus. It trades about 0.22 of its potential returns per unit of risk. Evolus Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,104 in Evolus Inc on November 1, 2024 and sell it today you would earn a total of 317.00 from holding Evolus Inc or generate 28.71% 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. Evolus Inc
Performance |
| Timeline |
| Bristol Myers Squibb |
| Evolus Inc |
Bristol Myers and Evolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Evolus
The main advantage of trading using opposite Bristol Myers and Evolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Evolus 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 Evolus will offset losses from the drop in Evolus' long position.| Bristol Myers vs. Collegium Pharmaceutical | Bristol Myers vs. Phibro Animal Health | Bristol Myers vs. ANI Pharmaceuticals | Bristol Myers vs. Procaps Group SA |
| Evolus vs. Collegium Pharmaceutical | Evolus vs. Phibro Animal Health | Evolus vs. ANI Pharmaceuticals | Evolus vs. Procaps Group SA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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