Correlation Between Aterian and BRISTOL
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By analyzing existing cross correlation between Aterian and BRISTOL MYERS SQUIBB CO, you can compare the effects of market volatilities on Aterian and BRISTOL 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 Aterian with a short position of BRISTOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aterian and BRISTOL.
Diversification Opportunities for Aterian and BRISTOL
Poor diversification
The 3 months correlation between Aterian and BRISTOL is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aterian and BRISTOL MYERS SQUIBB CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRISTOL MYERS SQUIBB and Aterian 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 Aterian are associated (or correlated) with BRISTOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRISTOL MYERS SQUIBB has no effect on the direction of Aterian i.e., Aterian and BRISTOL go up and down completely randomly.
Pair Corralation between Aterian and BRISTOL
Given the investment horizon of 90 days Aterian is expected to under-perform the BRISTOL. In addition to that, Aterian is 16.38 times more volatile than BRISTOL MYERS SQUIBB CO. It trades about -0.01 of its total potential returns per unit of risk. BRISTOL MYERS SQUIBB CO is currently generating about -0.01 per unit of volatility. If you would invest 9,774 in BRISTOL MYERS SQUIBB CO on August 31, 2024 and sell it today you would lose (108.00) from holding BRISTOL MYERS SQUIBB CO or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Aterian vs. BRISTOL MYERS SQUIBB CO
Performance |
| Timeline |
| Aterian |
| BRISTOL MYERS SQUIBB |
Aterian and BRISTOL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aterian and BRISTOL
The main advantage of trading using opposite Aterian and BRISTOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aterian position performs unexpectedly, BRISTOL 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 BRISTOL will offset losses from the drop in BRISTOL's long position.The idea behind Aterian and BRISTOL MYERS SQUIBB CO 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.| BRISTOL vs. Hooker Furniture | BRISTOL vs. Procter Gamble | BRISTOL vs. Aterian | BRISTOL vs. Eastman Kodak Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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