Correlation Between BridgeBio Pharma and EXACT Sciences

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

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

Diversification Opportunities for BridgeBio Pharma and EXACT Sciences

0.84

Correlation Coefficient

BridgeBio Pharma  EXACT Sciences

Very poor diversification

The 3 months correlation between BridgeBio and EXACT is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding BridgeBio Pharma and EXACT Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXACT Sciences and BridgeBio 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 BridgeBio Pharma are associated (or correlated) with EXACT Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXACT Sciences has no effect on the direction of BridgeBio Pharma i.e., BridgeBio Pharma and EXACT Sciences go up and down completely randomly.

Pair Corralation between BridgeBio Pharma and EXACT Sciences

Given the investment horizon of 90 days BridgeBio Pharma is expected to generate 2.45 times more return on investment than EXACT Sciences. However, BridgeBio Pharma is 2.45 times more volatile than EXACT Sciences. It trades about 0.2 of its potential returns per unit of risk. EXACT Sciences is currently generating about 0.33 per unit of risk. If you would invest  5,596  in BridgeBio Pharma on August 13, 2025 and sell it today you would earn a total of  1,062  from holding BridgeBio Pharma or generate 18.98% return on investment over 90 days.

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

BridgeBio Pharma  vs.  EXACT Sciences

BridgeBio Pharma

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BridgeBio Pharma are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, BridgeBio Pharma displayed solid returns over the last few months and may actually be approaching a breakup point.

EXACT Sciences

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in EXACT Sciences are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, EXACT Sciences unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BridgeBio Pharma and EXACT Sciences

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

The idea behind BridgeBio Pharma and EXACT Sciences 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.