Correlation Between Bristol Myers and Zura Bio
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Zura Bio 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 Zura Bio 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 Zura Bio Limited, you can compare the effects of market volatilities on Bristol Myers and Zura Bio 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 Zura Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Zura Bio.
Diversification Opportunities for Bristol Myers and Zura Bio
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bristol and Zura is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Zura Bio Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zura Bio Limited 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 Zura Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zura Bio Limited has no effect on the direction of Bristol Myers i.e., Bristol Myers and Zura Bio go up and down completely randomly.
Pair Corralation between Bristol Myers and Zura Bio
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.31 times more return on investment than Zura Bio. However, Bristol Myers Squibb is 3.23 times less risky than Zura Bio. It trades about 0.05 of its potential returns per unit of risk. Zura Bio Limited is currently generating about -0.02 per unit of risk. If you would invest 4,762 in Bristol Myers Squibb on November 9, 2024 and sell it today you would earn a total of 980.00 from holding Bristol Myers Squibb or generate 20.58% 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. Zura Bio Limited
Performance |
| Timeline |
| Bristol Myers Squibb |
| Zura Bio Limited |
Bristol Myers and Zura Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Zura Bio
The main advantage of trading using opposite Bristol Myers and Zura Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Zura Bio 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 Zura Bio will offset losses from the drop in Zura Bio's long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Zura Bio vs. Triumph Apparel | Zura Bio vs. Asure Software | Zura Bio vs. Definitive Healthcare Corp | Zura Bio vs. Skechers USA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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