Correlation Between Amicus Therapeutics and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both Amicus Therapeutics 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 Amicus Therapeutics and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amicus Therapeutics and Bristol Myers Squibb, you can compare the effects of market volatilities on Amicus Therapeutics 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 Amicus Therapeutics with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amicus Therapeutics and Bristol Myers.
Diversification Opportunities for Amicus Therapeutics and Bristol Myers
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amicus and Bristol is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Amicus Therapeutics 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 Amicus Therapeutics 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 Amicus Therapeutics 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 Amicus Therapeutics i.e., Amicus Therapeutics and Bristol Myers go up and down completely randomly.
Pair Corralation between Amicus Therapeutics and Bristol Myers
Given the investment horizon of 90 days Amicus Therapeutics is expected to under-perform the Bristol Myers. But the stock apears to be less risky and, when comparing its historical volatility, Amicus Therapeutics is 1.37 times less risky than Bristol Myers. The stock trades about -0.31 of its potential returns per unit of risk. The Bristol Myers Squibb is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,545 in Bristol Myers Squibb on September 3, 2024 and sell it today you would earn a total of 377.00 from holding Bristol Myers Squibb or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amicus Therapeutics vs. Bristol Myers Squibb
Performance |
| Timeline |
| Amicus Therapeutics |
| Bristol Myers Squibb |
Amicus Therapeutics and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amicus Therapeutics and Bristol Myers
The main advantage of trading using opposite Amicus Therapeutics and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amicus Therapeutics 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.| Amicus Therapeutics vs. Incyte | Amicus Therapeutics vs. Denali Therapeutics | Amicus Therapeutics vs. argenx NV ADR | Amicus Therapeutics vs. Harmony Biosciences Holdings |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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