Correlation Between Bristol Myers and Fortress Biotech
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Fortress Biotech 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 Fortress Biotech 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 Fortress Biotech, you can compare the effects of market volatilities on Bristol Myers and Fortress Biotech 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 Fortress Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Fortress Biotech.
Diversification Opportunities for Bristol Myers and Fortress Biotech
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bristol and Fortress is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Fortress Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech 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 Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech has no effect on the direction of Bristol Myers i.e., Bristol Myers and Fortress Biotech go up and down completely randomly.
Pair Corralation between Bristol Myers and Fortress Biotech
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.65 times more return on investment than Fortress Biotech. However, Bristol Myers Squibb is 1.53 times less risky than Fortress Biotech. It trades about 0.18 of its potential returns per unit of risk. Fortress Biotech is currently generating about -0.07 per unit of risk. If you would invest 5,264 in Bristol Myers Squibb on August 29, 2024 and sell it today you would earn a total of 610.00 from holding Bristol Myers Squibb or generate 11.59% 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. Fortress Biotech
Performance |
| Timeline |
| Bristol Myers Squibb |
| Fortress Biotech |
Bristol Myers and Fortress Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Fortress Biotech
The main advantage of trading using opposite Bristol Myers and Fortress Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Fortress Biotech 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 Fortress Biotech will offset losses from the drop in Fortress Biotech's long position.| Bristol Myers vs. Pharvaris BV | Bristol Myers vs. Brinker International | Bristol Myers vs. Alcoa Corp | Bristol Myers vs. Direxion Daily FTSE |
| Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Achilles Therapeutics PLC | Fortress Biotech vs. Aptose Biosciences | Fortress Biotech vs. Fortress Biotech Pref |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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