Correlation Between Bristol Myers and Horizon Pharma
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Horizon Pharma 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 Bristol Myers and Horizon Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristol Myers Squibb and Horizon Pharma PLC, you can compare the effects of market volatilities on Bristol Myers and Horizon Pharma 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 Bristol Myers with a short position of Horizon Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Horizon Pharma.
Diversification Opportunities for Bristol Myers and Horizon Pharma
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bristol and Horizon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Horizon Pharma PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Pharma PLC and Bristol Myers 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 Bristol Myers Squibb are associated (or correlated) with Horizon Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Pharma PLC has no effect on the direction of Bristol Myers i.e., Bristol Myers and Horizon Pharma go up and down completely randomly.
Pair Corralation between Bristol Myers and Horizon Pharma
If you would invest 11,630 in Horizon Pharma PLC on January 26, 2024 and sell it today you would earn a total of 0.00 from holding Horizon Pharma PLC or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.76% |
Values | Daily Returns |
Bristol Myers Squibb vs. Horizon Pharma PLC
Performance |
Timeline |
Bristol Myers Squibb |
Horizon Pharma PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bristol Myers and Horizon Pharma Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bristol Myers and Horizon Pharma
The main advantage of trading using opposite Bristol Myers and Horizon Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Horizon Pharma 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 Horizon Pharma will offset losses from the drop in Horizon Pharma's long position.Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
Horizon Pharma vs. Bristol Myers Squibb | Horizon Pharma vs. AbbVie Inc | Horizon Pharma vs. Merck Company | Horizon Pharma vs. Gilead Sciences |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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