Correlation Between Bristol Myers and NOW
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and NOW 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 Bristol Myers and NOW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristol Myers Squibb and NOW Inc, you can compare the effects of market volatilities on Bristol Myers and NOW 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 Bristol Myers with a short position of NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and NOW.
Diversification Opportunities for Bristol Myers and NOW
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and NOW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc and Bristol Myers 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 Bristol Myers Squibb are associated (or correlated) with NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of Bristol Myers i.e., Bristol Myers and NOW go up and down completely randomly.
Pair Corralation between Bristol Myers and NOW
If you would invest 110,500 in Bristol Myers Squibb on September 2, 2024 and sell it today you would earn a total of 11,700 from holding Bristol Myers Squibb or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. NOW Inc
Performance |
| Timeline |
| Bristol Myers Squibb |
| NOW Inc |
Bristol Myers and NOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and NOW
The main advantage of trading using opposite Bristol Myers and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW's long position.| Bristol Myers vs. Verizon Communications | Bristol Myers vs. First Republic Bank | Bristol Myers vs. UnitedHealth Group Incorporated | Bristol Myers vs. Prudential Financial |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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