Correlation Between Bristol Myers and Minerva Neurosciences
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Minerva Neurosciences 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 Minerva Neurosciences 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 Minerva Neurosciences, you can compare the effects of market volatilities on Bristol Myers and Minerva Neurosciences 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 Minerva Neurosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Minerva Neurosciences.
Diversification Opportunities for Bristol Myers and Minerva Neurosciences
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and Minerva is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Minerva Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerva Neurosciences 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 Minerva Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerva Neurosciences has no effect on the direction of Bristol Myers i.e., Bristol Myers and Minerva Neurosciences go up and down completely randomly.
Pair Corralation between Bristol Myers and Minerva Neurosciences
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Minerva Neurosciences. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 4.83 times less risky than Minerva Neurosciences. The stock trades about -0.01 of its potential returns per unit of risk. The Minerva Neurosciences is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 166.00 in Minerva Neurosciences on August 31, 2024 and sell it today you would earn a total of 59.50 from holding Minerva Neurosciences or generate 35.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Minerva Neurosciences
Performance |
| Timeline |
| Bristol Myers Squibb |
| Minerva Neurosciences |
Bristol Myers and Minerva Neurosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Minerva Neurosciences
The main advantage of trading using opposite Bristol Myers and Minerva Neurosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Minerva Neurosciences 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 Minerva Neurosciences will offset losses from the drop in Minerva Neurosciences' long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Minerva Neurosciences vs. Reviva Pharmaceuticals Holdings | Minerva Neurosciences vs. Eyenovia | Minerva Neurosciences vs. Cognition Therapeutics | Minerva Neurosciences vs. Transcode Therapeutics |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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