Correlation Between Bristol Myers and VistaGen Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and VistaGen Therapeutics 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 VistaGen Therapeutics 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 VistaGen Therapeutics, you can compare the effects of market volatilities on Bristol Myers and VistaGen Therapeutics 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 VistaGen Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and VistaGen Therapeutics.
Diversification Opportunities for Bristol Myers and VistaGen Therapeutics
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and VistaGen is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and VistaGen Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VistaGen Therapeutics 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 VistaGen Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VistaGen Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and VistaGen Therapeutics go up and down completely randomly.
Pair Corralation between Bristol Myers and VistaGen Therapeutics
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the VistaGen Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 20.26 times less risky than VistaGen Therapeutics. The stock trades about -0.02 of its potential returns per unit of risk. The VistaGen Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 351.00 in VistaGen Therapeutics on August 30, 2024 and sell it today you would lose (82.00) from holding VistaGen Therapeutics or give up 23.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. VistaGen Therapeutics
Performance |
| Timeline |
| Bristol Myers Squibb |
| VistaGen Therapeutics |
Bristol Myers and VistaGen Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and VistaGen Therapeutics
The main advantage of trading using opposite Bristol Myers and VistaGen Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, VistaGen Therapeutics 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 VistaGen Therapeutics will offset losses from the drop in VistaGen Therapeutics' long position.| Bristol Myers vs. Emergent Biosolutions | Bristol Myers vs. Bausch Health Companies | Bristol Myers vs. Neurocrine Biosciences | Bristol Myers vs. Teva Pharma Industries |
| VistaGen Therapeutics vs. Synlogic | VistaGen Therapeutics vs. AC Immune | VistaGen Therapeutics vs. Histogen | VistaGen Therapeutics vs. Entera 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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