Correlation Between Bristol Myers and Equillium
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Equillium 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 Equillium 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 Equillium, you can compare the effects of market volatilities on Bristol Myers and Equillium 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 Equillium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Equillium.
Diversification Opportunities for Bristol Myers and Equillium
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bristol and Equillium is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Equillium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equillium 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 Equillium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equillium has no effect on the direction of Bristol Myers i.e., Bristol Myers and Equillium go up and down completely randomly.
Pair Corralation between Bristol Myers and Equillium
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Equillium. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 4.41 times less risky than Equillium. The stock trades about -0.01 of its potential returns per unit of risk. The Equillium is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 111.00 in Equillium on September 1, 2024 and sell it today you would lose (36.00) from holding Equillium or give up 32.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Equillium
Performance |
| Timeline |
| Bristol Myers Squibb |
| Equillium |
Bristol Myers and Equillium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Equillium
The main advantage of trading using opposite Bristol Myers and Equillium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Equillium 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 Equillium will offset losses from the drop in Equillium's long position.| Bristol Myers vs. Crinetics Pharmaceuticals | Bristol Myers vs. Enanta Pharmaceuticals | Bristol Myers vs. Amicus Therapeutics | Bristol Myers vs. Connect Biopharma Holdings |
| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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