Correlation Between Connect Biopharma and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both Connect Biopharma and Bristol Myers 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 Connect Biopharma and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Connect Biopharma Holdings and Bristol Myers Squibb, you can compare the effects of market volatilities on Connect Biopharma and Bristol Myers 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 Connect Biopharma with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Connect Biopharma and Bristol Myers.
Diversification Opportunities for Connect Biopharma and Bristol Myers
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Connect and Bristol is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Connect Biopharma Holdings and Bristol Myers Squibb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristol Myers Squibb and Connect Biopharma 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 Connect Biopharma Holdings are associated (or correlated) with Bristol Myers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristol Myers Squibb has no effect on the direction of Connect Biopharma i.e., Connect Biopharma and Bristol Myers go up and down completely randomly.
Pair Corralation between Connect Biopharma and Bristol Myers
Given the investment horizon of 90 days Connect Biopharma Holdings is expected to generate 4.79 times more return on investment than Bristol Myers. However, Connect Biopharma is 4.79 times more volatile than Bristol Myers Squibb. It trades about 0.04 of its potential returns per unit of risk. Bristol Myers Squibb is currently generating about -0.02 per unit of risk. If you would invest 86.00 in Connect Biopharma Holdings on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Connect Biopharma Holdings or generate 23.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Connect Biopharma Holdings vs. Bristol Myers Squibb
Performance |
| Timeline |
| Connect Biopharma |
| Bristol Myers Squibb |
Connect Biopharma and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Connect Biopharma and Bristol Myers
The main advantage of trading using opposite Connect Biopharma and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Connect Biopharma position performs unexpectedly, Bristol Myers 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 Bristol Myers will offset losses from the drop in Bristol Myers' long position.| Connect Biopharma vs. DiaMedica Therapeutics | Connect Biopharma vs. Lyra Therapeutics | Connect Biopharma vs. Centessa Pharmaceuticals PLC |
| Bristol Myers vs. Pfizer Inc | Bristol Myers vs. Johnson Johnson | Bristol Myers vs. Highway Holdings Limited | Bristol Myers vs. QCR Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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