Correlation Between Bristol Myers and Scholar Rock
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Scholar Rock 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 Scholar Rock 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 Scholar Rock Holding, you can compare the effects of market volatilities on Bristol Myers and Scholar Rock 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 Scholar Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Scholar Rock.
Diversification Opportunities for Bristol Myers and Scholar Rock
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bristol and Scholar is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Scholar Rock Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scholar Rock 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 Scholar Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scholar Rock Holding has no effect on the direction of Bristol Myers i.e., Bristol Myers and Scholar Rock go up and down completely randomly.
Pair Corralation between Bristol Myers and Scholar Rock
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.54 times more return on investment than Scholar Rock. However, Bristol Myers Squibb is 1.86 times less risky than Scholar Rock. It trades about 0.01 of its potential returns per unit of risk. Scholar Rock Holding is currently generating about -0.12 per unit of risk. If you would invest 5,912 in Bristol Myers Squibb on December 6, 2024 and sell it today you would earn a total of 4.00 from holding Bristol Myers Squibb or generate 0.07% 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. Scholar Rock Holding
Performance |
| Timeline |
| Bristol Myers Squibb |
| Scholar Rock Holding |
Bristol Myers and Scholar Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Scholar Rock
The main advantage of trading using opposite Bristol Myers and Scholar Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Scholar Rock 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 Scholar Rock will offset losses from the drop in Scholar Rock's long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Scholar Rock vs. Revolution Medicines | Scholar Rock vs. Black Diamond Therapeutics | Scholar Rock vs. Passage Bio | Scholar Rock vs. Monte Rosa 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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