Correlation Between Blueprint Medicines and FIXX Old

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

Diversification Opportunities for Blueprint Medicines and FIXX Old

0.49

Correlation Coefficient

Blueprint Medicines  FIXX Old

Very weak diversification

The 3 months correlation between Blueprint and FIXX is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Blueprint Medicines Corp and FIXX Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIXX Old 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 FIXX Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIXX Old has no effect on the direction of Blueprint Medicines i.e., Blueprint Medicines and FIXX Old go up and down completely randomly.

Pair Corralation between Blueprint Medicines and FIXX Old

If you would invest  9,014  in Blueprint Medicines Corp on October 21, 2024 and sell it today you would earn a total of  1,991  from holding Blueprint Medicines Corp or generate 22.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Blueprint Medicines Corp  vs.  FIXX Old

Blueprint Medicines Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blueprint Medicines Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating primary indicators, Blueprint Medicines exhibited solid returns over the last few months and may actually be approaching a breakup point.

FIXX Old

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Blueprint Medicines and FIXX Old

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

The idea behind Blueprint Medicines Corp and FIXX Old 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.