Correlation Between BridgeBio Pharma and Ionis Pharmaceuticals

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

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

Diversification Opportunities for BridgeBio Pharma and Ionis Pharmaceuticals

0.76

Correlation Coefficient

BridgeBio Pharma  Ionis Pharmaceuticals

Poor diversification

The 3 months correlation between BridgeBio and Ionis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BridgeBio Pharma and Ionis Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ionis Pharmaceuticals 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 Ionis Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ionis Pharmaceuticals has no effect on the direction of BridgeBio Pharma i.e., BridgeBio Pharma and Ionis Pharmaceuticals go up and down completely randomly.

Pair Corralation between BridgeBio Pharma and Ionis Pharmaceuticals

Given the investment horizon of 90 days BridgeBio Pharma is expected to generate 1.95 times less return on investment than Ionis Pharmaceuticals. But when comparing it to its historical volatility, BridgeBio Pharma is 1.41 times less risky than Ionis Pharmaceuticals. It trades about 0.14 of its potential returns per unit of risk. Ionis Pharmaceuticals is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,345  in Ionis Pharmaceuticals on August 4, 2025 and sell it today you would earn a total of  3,085  from holding Ionis Pharmaceuticals or generate 71.0% return on investment over 90 days.

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

BridgeBio Pharma  vs.  Ionis Pharmaceuticals

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 abnormal forward indicators, BridgeBio Pharma displayed solid returns over the last few months and may actually be approaching a breakup point.

Ionis Pharmaceuticals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ionis Pharmaceuticals are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Ionis Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BridgeBio Pharma and Ionis Pharmaceuticals

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

The idea behind BridgeBio Pharma and Ionis 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.