Correlation Between FibroGen and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both FibroGen 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 FibroGen and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibroGen and Bristol Myers Squibb, you can compare the effects of market volatilities on FibroGen 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 FibroGen with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibroGen and Bristol Myers.
Diversification Opportunities for FibroGen and Bristol Myers
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FibroGen and Bristol is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FibroGen 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 FibroGen 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 FibroGen 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 FibroGen i.e., FibroGen and Bristol Myers go up and down completely randomly.
Pair Corralation between FibroGen and Bristol Myers
Assuming the 90 days trading horizon FibroGen is expected to generate 3.56 times more return on investment than Bristol Myers. However, FibroGen is 3.56 times more volatile than Bristol Myers Squibb. It trades about 0.29 of its potential returns per unit of risk. Bristol Myers Squibb is currently generating about -0.08 per unit of risk. If you would invest 1,025 in FibroGen on November 28, 2024 and sell it today you would earn a total of 476.00 from holding FibroGen or generate 46.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FibroGen vs. Bristol Myers Squibb
Performance |
| Timeline |
| FibroGen |
| Bristol Myers Squibb |
FibroGen and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibroGen and Bristol Myers
The main advantage of trading using opposite FibroGen and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibroGen 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.| FibroGen vs. McEwen Mining | FibroGen vs. FibraHotel | FibroGen vs. Lloyds Banking Group | FibroGen vs. GMxico Transportes SAB |
| Bristol Myers vs. Lloyds Banking Group | Bristol Myers vs. Desarrolladora Homex SAB | Bristol Myers vs. United States Steel | Bristol Myers vs. Grupo Hotelero Santa |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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