Correlation Between Bristol Myers and Promotora
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Promotora 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 Promotora 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 Promotora y Operadora, you can compare the effects of market volatilities on Bristol Myers and Promotora 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 Promotora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Promotora.
Diversification Opportunities for Bristol Myers and Promotora
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bristol and Promotora is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Promotora y Operadora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promotora y Operadora 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 Promotora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promotora y Operadora has no effect on the direction of Bristol Myers i.e., Bristol Myers and Promotora go up and down completely randomly.
Pair Corralation between Bristol Myers and Promotora
Assuming the 90 days trading horizon Bristol Myers Squibb is expected to generate 2.1 times more return on investment than Promotora. However, Bristol Myers is 2.1 times more volatile than Promotora y Operadora. It trades about 0.23 of its potential returns per unit of risk. Promotora y Operadora is currently generating about 0.09 per unit of risk. If you would invest 104,501 in Bristol Myers Squibb on August 30, 2024 and sell it today you would earn a total of 17,699 from holding Bristol Myers Squibb or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Promotora y Operadora
Performance |
| Timeline |
| Bristol Myers Squibb |
| Promotora y Operadora |
Bristol Myers and Promotora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Promotora
The main advantage of trading using opposite Bristol Myers and Promotora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Promotora 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 Promotora will offset losses from the drop in Promotora's long position.| Bristol Myers vs. Eli Lilly and | Bristol Myers vs. Roche Holding AG | Bristol Myers vs. Amgen Inc | Bristol Myers vs. Biogen Inc |
| Promotora vs. Grupo Profuturo SAB | Promotora vs. Corporacin Inmobiliaria Vesta | Promotora vs. Financiera Independencia SAB | Promotora vs. The Select Sector |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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