Correlation Between Brickell Biotech and BELLUS Health
Can any of the company-specific risk be diversified away by investing in both Brickell Biotech and BELLUS Health 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 Brickell Biotech and BELLUS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brickell Biotech and BELLUS Health, you can compare the effects of market volatilities on Brickell Biotech and BELLUS Health 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 Brickell Biotech with a short position of BELLUS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brickell Biotech and BELLUS Health.
Diversification Opportunities for Brickell Biotech and BELLUS Health
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brickell and BELLUS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Brickell Biotech and BELLUS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BELLUS Health and Brickell Biotech 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 Brickell Biotech are associated (or correlated) with BELLUS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BELLUS Health has no effect on the direction of Brickell Biotech i.e., Brickell Biotech and BELLUS Health go up and down completely randomly.
Pair Corralation between Brickell Biotech and BELLUS Health
If you would invest 90.00 in Brickell Biotech on December 29, 2023 and sell it today you would earn a total of 0.00 from holding Brickell Biotech or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Brickell Biotech vs. BELLUS Health
Performance |
Timeline |
Brickell Biotech |
BELLUS Health |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Brickell Biotech and BELLUS Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brickell Biotech and BELLUS Health
The main advantage of trading using opposite Brickell Biotech and BELLUS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brickell Biotech position performs unexpectedly, BELLUS Health 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 BELLUS Health will offset losses from the drop in BELLUS Health's long position.Brickell Biotech vs. Agilent Technologies | Brickell Biotech vs. Clever Leaves Holdings | Brickell Biotech vs. Equillium | Brickell Biotech vs. Kineta Inc |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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