Correlation Between Bristol Myers and Serina Therapeutics

Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Serina Therapeutics 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 Serina Therapeutics 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 Serina Therapeutics, you can compare the effects of market volatilities on Bristol Myers and Serina Therapeutics 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 Serina Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Serina Therapeutics.

Diversification Opportunities for Bristol Myers and Serina Therapeutics

-0.71

Correlation Coefficient

Bristol Myers  Serina Therapeutics

Pay attention - limited upside

The 3 months correlation between Bristol and Serina is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics 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 Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Bristol Myers i.e., Bristol Myers and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Bristol Myers and Serina Therapeutics

Considering the 90-day investment horizon Bristol Myers is expected to generate 1.11 times less return on investment than Serina Therapeutics. But when comparing it to its historical volatility, Bristol Myers Squibb is 5.94 times less risky than Serina Therapeutics. It trades about 0.06 of its potential returns per unit of risk. Serina Therapeutics is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Serina Therapeutics on September 19, 2024 and sell it today you would lose (21.00) from holding Serina Therapeutics or give up 4.2% of portfolio value over 90 days.

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

Bristol Myers Squibb  vs.  Serina Therapeutics

Bristol Myers Squibb

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Bristol Myers showed solid returns over the last few months and may actually be approaching a breakup point.

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Serina Therapeutics is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bristol Myers and Serina Therapeutics

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

The idea behind Bristol Myers Squibb and Serina Therapeutics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.