Correlation Between Bristol Myers and Structure Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Structure 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 Structure 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 Structure Therapeutics American, you can compare the effects of market volatilities on Bristol Myers and Structure 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 Structure Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Structure Therapeutics.
Diversification Opportunities for Bristol Myers and Structure Therapeutics
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bristol and Structure is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Structure Therapeutics America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Structure 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 Structure Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Structure Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and Structure Therapeutics go up and down completely randomly.
Pair Corralation between Bristol Myers and Structure Therapeutics
Considering the 90-day investment horizon Bristol Myers is expected to generate 8.7 times less return on investment than Structure Therapeutics. But when comparing it to its historical volatility, Bristol Myers Squibb is 2.07 times less risky than Structure Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Structure Therapeutics American is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,704 in Structure Therapeutics American on November 9, 2024 and sell it today you would earn a total of 298.00 from holding Structure Therapeutics American or generate 11.02% 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. Structure Therapeutics America
Performance |
| Timeline |
| Bristol Myers Squibb |
| Structure Therapeutics |
Bristol Myers and Structure Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Structure Therapeutics
The main advantage of trading using opposite Bristol Myers and Structure Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Structure 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 Structure Therapeutics will offset losses from the drop in Structure Therapeutics' long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Structure Therapeutics vs. Day One Biopharmaceuticals | Structure Therapeutics vs. X4 Pharmaceuticals | Structure Therapeutics vs. Inozyme Pharma | Structure Therapeutics vs. Acumen Pharmaceuticals |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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