Correlation Between Blueprint Medicines and Terns Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Blueprint Medicines and Terns Pharmaceuticals 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 Terns Pharmaceuticals 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 Terns Pharmaceuticals, you can compare the effects of market volatilities on Blueprint Medicines and Terns Pharmaceuticals 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 Terns Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blueprint Medicines and Terns Pharmaceuticals.
Diversification Opportunities for Blueprint Medicines and Terns Pharmaceuticals
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blueprint and Terns is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Blueprint Medicines Corp and Terns Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terns Pharmaceuticals 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 Terns Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terns Pharmaceuticals has no effect on the direction of Blueprint Medicines i.e., Blueprint Medicines and Terns Pharmaceuticals go up and down completely randomly.
Pair Corralation between Blueprint Medicines and Terns Pharmaceuticals
Given the investment horizon of 90 days Blueprint Medicines Corp is expected to generate 1.87 times more return on investment than Terns Pharmaceuticals. However, Blueprint Medicines is 1.87 times more volatile than Terns Pharmaceuticals. It trades about 0.25 of its potential returns per unit of risk. Terns Pharmaceuticals is currently generating about -0.6 per unit of risk. If you would invest 8,893 in Blueprint Medicines Corp on October 20, 2024 and sell it today you would earn a total of 2,112 from holding Blueprint Medicines Corp or generate 23.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blueprint Medicines Corp vs. Terns Pharmaceuticals
Performance |
| Timeline |
| Blueprint Medicines Corp |
| Terns Pharmaceuticals |
Blueprint Medicines and Terns Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blueprint Medicines and Terns Pharmaceuticals
The main advantage of trading using opposite Blueprint Medicines and Terns Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blueprint Medicines position performs unexpectedly, Terns Pharmaceuticals 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 Terns Pharmaceuticals will offset losses from the drop in Terns Pharmaceuticals' long position.| Blueprint Medicines vs. Terns Pharmaceuticals | Blueprint Medicines vs. Amylyx Pharmaceuticals | Blueprint Medicines vs. Acumen Pharmaceuticals | Blueprint Medicines vs. Inozyme Pharma |
| Terns Pharmaceuticals vs. Amylyx Pharmaceuticals | Terns Pharmaceuticals vs. Acumen Pharmaceuticals | Terns Pharmaceuticals vs. Inozyme Pharma | Terns Pharmaceuticals vs. X4 Pharmaceuticals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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