Correlation Between CSL and BridgeBio Pharma,

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

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

Diversification Opportunities for CSL and BridgeBio Pharma,

-0.28

Correlation Coefficient

CSL  BridgeBio Pharma,

Very good diversification

The 3 months correlation between CSL and BridgeBio is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and BridgeBio Pharma, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BridgeBio Pharma, and CSL 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 CSL Limited are associated (or correlated) with BridgeBio Pharma,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BridgeBio Pharma, has no effect on the direction of CSL i.e., CSL and BridgeBio Pharma, go up and down completely randomly.

Pair Corralation between CSL and BridgeBio Pharma,

Assuming the 90 days horizon CSL is expected to generate 2.01 times less return on investment than BridgeBio Pharma,. But when comparing it to its historical volatility, CSL Limited is 1.42 times less risky than BridgeBio Pharma,. It trades about 0.21 of its potential returns per unit of risk. BridgeBio Pharma, is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  3,431  in BridgeBio Pharma, on April 21, 2025 and sell it today you would earn a total of  523.00  from holding BridgeBio Pharma, or generate 15.24% return on investment over 90 days.

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

CSL Limited  vs.  BridgeBio Pharma,

CSL Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CSL Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

BridgeBio Pharma,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BridgeBio Pharma, are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BridgeBio Pharma, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and BridgeBio Pharma,

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

The idea behind CSL Limited and BridgeBio Pharma, 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.