Correlation Between Blueprint Medicines and Enliven Therapeutics

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

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

Diversification Opportunities for Blueprint Medicines and Enliven Therapeutics

0.06

Correlation Coefficient

Blueprint Medicines  Enliven Therapeutics

Significant diversification

The 3 months correlation between Blueprint and Enliven is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Blueprint Medicines Corp and Enliven Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enliven Therapeutics and Blueprint Medicines 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 Blueprint Medicines Corp are associated (or correlated) with Enliven Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enliven Therapeutics has no effect on the direction of Blueprint Medicines i.e., Blueprint Medicines and Enliven Therapeutics go up and down completely randomly.

Pair Corralation between Blueprint Medicines and Enliven Therapeutics

Given the investment horizon of 90 days Blueprint Medicines Corp is expected to generate 1.05 times more return on investment than Enliven Therapeutics. However, Blueprint Medicines is 1.05 times more volatile than Enliven Therapeutics. It trades about 0.03 of its potential returns per unit of risk. Enliven Therapeutics is currently generating about -0.01 per unit of risk. If you would invest  8,682  in Blueprint Medicines Corp on December 30, 2024 and sell it today you would earn a total of  190.00  from holding Blueprint Medicines Corp or generate 2.19% return on investment over 90 days.

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

Blueprint Medicines Corp  vs.  Enliven Therapeutics

Blueprint Medicines Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Blueprint Medicines Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Blueprint Medicines is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Enliven Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enliven Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Enliven Therapeutics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Blueprint Medicines and Enliven Therapeutics

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

The idea behind Blueprint Medicines Corp and Enliven 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.