Correlation Between Bristol Myers and Omeros
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Omeros 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 Omeros 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 Omeros, you can compare the effects of market volatilities on Bristol Myers and Omeros 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 Omeros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Omeros.
Diversification Opportunities for Bristol Myers and Omeros
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bristol and Omeros is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Omeros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omeros 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 Omeros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omeros has no effect on the direction of Bristol Myers i.e., Bristol Myers and Omeros go up and down completely randomly.
Pair Corralation between Bristol Myers and Omeros
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Omeros. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 12.59 times less risky than Omeros. The stock trades about -0.14 of its potential returns per unit of risk. The Omeros is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 426.00 in Omeros on September 13, 2024 and sell it today you would earn a total of 475.00 from holding Omeros or generate 111.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Omeros
Performance |
| Timeline |
| Bristol Myers Squibb |
| Omeros |
Bristol Myers and Omeros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Omeros
The main advantage of trading using opposite Bristol Myers and Omeros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Omeros 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 Omeros will offset losses from the drop in Omeros' long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Omeros vs. Crinetics Pharmaceuticals | Omeros vs. Enanta Pharmaceuticals | Omeros vs. Amicus Therapeutics | Omeros vs. Connect Biopharma Holdings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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