Correlation Between Bristol Myers and Nuvectis Pharma
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Nuvectis Pharma 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 Nuvectis Pharma 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 Nuvectis Pharma, you can compare the effects of market volatilities on Bristol Myers and Nuvectis Pharma 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 Nuvectis Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Nuvectis Pharma.
Diversification Opportunities for Bristol Myers and Nuvectis Pharma
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bristol and Nuvectis is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Nuvectis Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuvectis Pharma 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 Nuvectis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuvectis Pharma has no effect on the direction of Bristol Myers i.e., Bristol Myers and Nuvectis Pharma go up and down completely randomly.
Pair Corralation between Bristol Myers and Nuvectis Pharma
Considering the 90-day investment horizon Bristol Myers is expected to generate 2.29 times less return on investment than Nuvectis Pharma. But when comparing it to its historical volatility, Bristol Myers Squibb is 3.47 times less risky than Nuvectis Pharma. It trades about 0.05 of its potential returns per unit of risk. Nuvectis Pharma is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 740.00 in Nuvectis Pharma on November 9, 2024 and sell it today you would lose (16.00) from holding Nuvectis Pharma or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Nuvectis Pharma
Performance |
| Timeline |
| Bristol Myers Squibb |
| Nuvectis Pharma |
Bristol Myers and Nuvectis Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Nuvectis Pharma
The main advantage of trading using opposite Bristol Myers and Nuvectis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Nuvectis Pharma 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 Nuvectis Pharma will offset losses from the drop in Nuvectis Pharma's long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Nuvectis Pharma vs. Replimune Group | Nuvectis Pharma vs. Lyra Therapeutics | Nuvectis Pharma vs. Kronos Bio | Nuvectis Pharma vs. Gossamer Bio |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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