Correlation Between Bristol Myers and GeneDx Holdings
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and GeneDx Holdings 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 GeneDx Holdings 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 GeneDx Holdings Corp, you can compare the effects of market volatilities on Bristol Myers and GeneDx Holdings 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 GeneDx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and GeneDx Holdings.
Diversification Opportunities for Bristol Myers and GeneDx Holdings
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bristol and GeneDx is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and GeneDx Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneDx Holdings Corp 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 GeneDx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneDx Holdings Corp has no effect on the direction of Bristol Myers i.e., Bristol Myers and GeneDx Holdings go up and down completely randomly.
Pair Corralation between Bristol Myers and GeneDx Holdings
Considering the 90-day investment horizon Bristol Myers is expected to generate 3.72 times less return on investment than GeneDx Holdings. But when comparing it to its historical volatility, Bristol Myers Squibb is 3.87 times less risky than GeneDx Holdings. It trades about 0.19 of its potential returns per unit of risk. GeneDx Holdings Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,606 in GeneDx Holdings Corp on August 27, 2024 and sell it today you would earn a total of 2,265 from holding GeneDx Holdings Corp or generate 40.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. GeneDx Holdings Corp
Performance |
| Timeline |
| Bristol Myers Squibb |
| GeneDx Holdings Corp |
Bristol Myers and GeneDx Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and GeneDx Holdings
The main advantage of trading using opposite Bristol Myers and GeneDx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, GeneDx Holdings 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 GeneDx Holdings will offset losses from the drop in GeneDx Holdings' long position.| Bristol Myers vs. Capricor Therapeutics | Bristol Myers vs. Soleno Therapeutics | Bristol Myers vs. Bio Path Holdings | Bristol Myers vs. Moleculin Biotech |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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