Correlation Between BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals

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

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

Diversification Opportunities for BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals

-0.08

Correlation Coefficient

BioCryst Pharmaceuticals  Cyclacel Pharmaceuticals

Good diversification

The 3 months correlation between BioCryst and Cyclacel is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cyclacel Pharmaceuticals and BioCryst Pharmaceuticals 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 BioCryst Pharmaceuticals are associated (or correlated) with Cyclacel Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cyclacel Pharmaceuticals has no effect on the direction of BioCryst Pharmaceuticals i.e., BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals go up and down completely randomly.

Pair Corralation between BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals

Given the investment horizon of 90 days BioCryst Pharmaceuticals is expected to generate 0.55 times more return on investment than Cyclacel Pharmaceuticals. However, BioCryst Pharmaceuticals is 1.82 times less risky than Cyclacel Pharmaceuticals. It trades about 0.02 of its potential returns per unit of risk. Cyclacel Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest  771.00  in BioCryst Pharmaceuticals on December 27, 2024 and sell it today you would earn a total of  9.00  from holding BioCryst Pharmaceuticals or generate 1.17% return on investment over 90 days.

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

BioCryst Pharmaceuticals  vs.  Cyclacel Pharmaceuticals

BioCryst Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BioCryst Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, BioCryst Pharmaceuticals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cyclacel Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cyclacel Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals

The main advantage of trading using opposite BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioCryst Pharmaceuticals position performs unexpectedly, Cyclacel Pharmaceuticals 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 Cyclacel Pharmaceuticals will offset losses from the drop in Cyclacel Pharmaceuticals' long position.

The idea behind BioCryst Pharmaceuticals and Cyclacel Pharmaceuticals 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.