Correlation Between Astellas Pharma and Bristol Myers

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Astellas Pharma 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 Astellas Pharma and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astellas Pharma and Bristol Myers Squibb, you can compare the effects of market volatilities on Astellas Pharma 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 Astellas Pharma with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astellas Pharma and Bristol Myers.

Diversification Opportunities for Astellas Pharma and Bristol Myers

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Astellas and Bristol is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astellas Pharma 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 Astellas Pharma 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 Astellas Pharma 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 Astellas Pharma i.e., Astellas Pharma and Bristol Myers go up and down completely randomly.

Pair Corralation between Astellas Pharma and Bristol Myers

Assuming the 90 days horizon Astellas Pharma is expected to under-perform the Bristol Myers. In addition to that, Astellas Pharma is 1.11 times more volatile than Bristol Myers Squibb. It trades about -0.12 of its total potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.07 per unit of volatility. If you would invest  84,453  in Bristol Myers Squibb on October 21, 2024 and sell it today you would earn a total of  9,069  from holding Bristol Myers Squibb or generate 10.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.41%
ValuesDaily Returns

Astellas Pharma  vs.  Bristol Myers Squibb

 Performance 
       Timeline  
Astellas Pharma 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Astellas Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Bristol Myers Squibb 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile primary indicators, Bristol Myers reported solid returns over the last few months and may actually be approaching a breakup point.

Astellas Pharma and Bristol Myers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Astellas Pharma and Bristol Myers

The main advantage of trading using opposite Astellas Pharma and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astellas Pharma 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.
The idea behind Astellas Pharma and Bristol Myers Squibb 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules