Correlation Between Bristol Myers and Windtree Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Windtree 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 Windtree 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 Windtree Therapeutics, you can compare the effects of market volatilities on Bristol Myers and Windtree 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 Windtree Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Windtree Therapeutics.
Diversification Opportunities for Bristol Myers and Windtree Therapeutics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bristol and Windtree is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Windtree Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windtree 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 Windtree Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windtree Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and Windtree Therapeutics go up and down completely randomly.
Pair Corralation between Bristol Myers and Windtree Therapeutics
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.11 times more return on investment than Windtree Therapeutics. However, Bristol Myers Squibb is 8.79 times less risky than Windtree Therapeutics. It trades about 0.15 of its potential returns per unit of risk. Windtree Therapeutics is currently generating about -0.01 per unit of risk. If you would invest 4,069 in Bristol Myers Squibb on September 1, 2024 and sell it today you would earn a total of 1,853 from holding Bristol Myers Squibb or generate 45.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Windtree Therapeutics
Performance |
| Timeline |
| Bristol Myers Squibb |
| Windtree Therapeutics |
Bristol Myers and Windtree Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Windtree Therapeutics
The main advantage of trading using opposite Bristol Myers and Windtree Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Windtree 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 Windtree Therapeutics will offset losses from the drop in Windtree Therapeutics' long position.| Bristol Myers vs. Crinetics Pharmaceuticals | Bristol Myers vs. Enanta Pharmaceuticals | Bristol Myers vs. Amicus Therapeutics | Bristol Myers vs. Connect Biopharma Holdings |
| Windtree Therapeutics vs. Neurobo Pharmaceuticals | Windtree Therapeutics vs. Palisade Bio | Windtree Therapeutics vs. Lixte Biotechnology Holdings | Windtree Therapeutics vs. Avenue 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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