Correlation Between Blueprint Medicines and LianBio ADR
Can any of the company-specific risk be diversified away by investing in both Blueprint Medicines and LianBio ADR 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 Blueprint Medicines and LianBio ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blueprint Medicines Corp and LianBio ADR, you can compare the effects of market volatilities on Blueprint Medicines and LianBio ADR 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 Blueprint Medicines with a short position of LianBio ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueprint Medicines and LianBio ADR.
Diversification Opportunities for Blueprint Medicines and LianBio ADR
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blueprint and LianBio is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Blueprint Medicines Corp and LianBio ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianBio ADR and Blueprint Medicines 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 Blueprint Medicines Corp are associated (or correlated) with LianBio ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianBio ADR has no effect on the direction of Blueprint Medicines i.e., Blueprint Medicines and LianBio ADR go up and down completely randomly.
Pair Corralation between Blueprint Medicines and LianBio ADR
If you would invest 8,277 in Blueprint Medicines Corp on August 29, 2024 and sell it today you would earn a total of 1,186 from holding Blueprint Medicines Corp or generate 14.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Blueprint Medicines Corp vs. LianBio ADR
Performance |
| Timeline |
| Blueprint Medicines Corp |
| LianBio ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Blueprint Medicines and LianBio ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blueprint Medicines and LianBio ADR
The main advantage of trading using opposite Blueprint Medicines and LianBio ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blueprint Medicines position performs unexpectedly, LianBio ADR 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 LianBio ADR will offset losses from the drop in LianBio ADR's long position.| Blueprint Medicines vs. Terns Pharmaceuticals | Blueprint Medicines vs. Amylyx Pharmaceuticals | Blueprint Medicines vs. Acumen Pharmaceuticals | Blueprint Medicines vs. Inozyme Pharma |
| LianBio ADR vs. Sensei Biotherapeutics | LianBio ADR vs. NextCure | LianBio ADR vs. Nuvation Bio | LianBio ADR vs. Inozyme Pharma |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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