Correlation Between Summit Therapeutics and BridgeBio Pharma

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

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

Diversification Opportunities for Summit Therapeutics and BridgeBio Pharma

-0.59

Correlation Coefficient

Summit Therapeutics  BridgeBio Pharma

Excellent diversification

The 3 months correlation between Summit and BridgeBio is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Summit Therapeutics PLC and BridgeBio Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BridgeBio Pharma and Summit Therapeutics 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 Summit Therapeutics PLC 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 Summit Therapeutics i.e., Summit Therapeutics and BridgeBio Pharma go up and down completely randomly.

Pair Corralation between Summit Therapeutics and BridgeBio Pharma

Given the investment horizon of 90 days Summit Therapeutics PLC is expected to under-perform the BridgeBio Pharma. In addition to that, Summit Therapeutics is 1.6 times more volatile than BridgeBio Pharma. It trades about -0.07 of its total potential returns per unit of risk. BridgeBio Pharma is currently generating about 0.2 per unit of volatility. If you would invest  5,000  in BridgeBio Pharma on September 1, 2025 and sell it today you would earn a total of  2,201  from holding BridgeBio Pharma or generate 44.02% return on investment over 90 days.

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

Summit Therapeutics PLC  vs.  BridgeBio Pharma

Summit Therapeutics PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days Summit Therapeutics PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in December 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BridgeBio Pharma

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BridgeBio Pharma are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, BridgeBio Pharma displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Summit Therapeutics and BridgeBio Pharma

The main advantage of trading using opposite Summit Therapeutics and BridgeBio Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Therapeutics 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 Summit Therapeutics PLC 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.