Correlation Between Brooklyn Immunotherapeuti and BELLUS Health

Can any of the company-specific risk be diversified away by investing in both Brooklyn Immunotherapeuti 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 Brooklyn Immunotherapeuti and BELLUS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brooklyn Immunotherapeutics and BELLUS Health, you can compare the effects of market volatilities on Brooklyn Immunotherapeuti 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 Brooklyn Immunotherapeuti with a short position of BELLUS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooklyn Immunotherapeuti and BELLUS Health.

Diversification Opportunities for Brooklyn Immunotherapeuti and BELLUS Health

-0.58

Correlation Coefficient

Brooklyn Immunotherapeuti  BELLUS Health

Excellent diversification

The 3 months correlation between Brooklyn and BELLUS is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Brooklyn Immunotherapeutics and BELLUS Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BELLUS Health and Brooklyn Immunotherapeuti 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 Brooklyn Immunotherapeutics 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 Brooklyn Immunotherapeuti i.e., Brooklyn Immunotherapeuti and BELLUS Health go up and down completely randomly.

Pair Corralation between Brooklyn Immunotherapeuti and BELLUS Health

If you would invest  1,474  in BELLUS Health on January 25, 2024 and sell it today you would earn a total of  0.00  from holding BELLUS Health or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Brooklyn Immunotherapeutics  vs.  BELLUS Health

Brooklyn Immunotherapeuti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brooklyn Immunotherapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Brooklyn Immunotherapeuti is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

BELLUS Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BELLUS Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, BELLUS Health is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Brooklyn Immunotherapeuti and BELLUS Health

The main advantage of trading using opposite Brooklyn Immunotherapeuti and BELLUS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooklyn Immunotherapeuti 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.

The idea behind Brooklyn Immunotherapeutics and BELLUS Health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.