Correlation Between Bristol Myers and Scilex Holding
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Scilex Holding 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 Scilex Holding 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 Scilex Holding, you can compare the effects of market volatilities on Bristol Myers and Scilex Holding 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 Scilex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Scilex Holding.
Diversification Opportunities for Bristol Myers and Scilex Holding
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bristol and Scilex is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding 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 Scilex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scilex Holding has no effect on the direction of Bristol Myers i.e., Bristol Myers and Scilex Holding go up and down completely randomly.
Pair Corralation between Bristol Myers and Scilex Holding
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.29 times more return on investment than Scilex Holding. However, Bristol Myers Squibb is 3.47 times less risky than Scilex Holding. It trades about 0.11 of its potential returns per unit of risk. Scilex Holding is currently generating about -0.11 per unit of risk. If you would invest 4,942 in Bristol Myers Squibb on November 2, 2024 and sell it today you would earn a total of 972.00 from holding Bristol Myers Squibb or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Scilex Holding
Performance |
| Timeline |
| Bristol Myers Squibb |
| Scilex Holding |
Bristol Myers and Scilex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Scilex Holding
The main advantage of trading using opposite Bristol Myers and Scilex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Scilex Holding 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 Scilex Holding will offset losses from the drop in Scilex Holding's long position.| Bristol Myers vs. Collegium Pharmaceutical | Bristol Myers vs. Phibro Animal Health | Bristol Myers vs. ANI Pharmaceuticals | Bristol Myers vs. Procaps Group SA |
| Scilex Holding vs. AstraZeneca PLC ADR | Scilex Holding vs. Gilead Sciences | Scilex Holding vs. Bristol Myers Squibb | Scilex Holding vs. Amgen Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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