Correlation Between Bristol Myers and Airsculpt Technologies
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Airsculpt Technologies 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 Airsculpt Technologies 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 Airsculpt Technologies, you can compare the effects of market volatilities on Bristol Myers and Airsculpt Technologies 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 Airsculpt Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Airsculpt Technologies.
Diversification Opportunities for Bristol Myers and Airsculpt Technologies
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bristol and Airsculpt is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Airsculpt Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airsculpt Technologies 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 Airsculpt Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airsculpt Technologies has no effect on the direction of Bristol Myers i.e., Bristol Myers and Airsculpt Technologies go up and down completely randomly.
Pair Corralation between Bristol Myers and Airsculpt Technologies
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Airsculpt Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 3.19 times less risky than Airsculpt Technologies. The stock trades about -0.02 of its potential returns per unit of risk. The Airsculpt Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 322.00 in Airsculpt Technologies on August 28, 2024 and sell it today you would earn a total of 402.00 from holding Airsculpt Technologies or generate 124.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Airsculpt Technologies
Performance |
| Timeline |
| Bristol Myers Squibb |
| Airsculpt Technologies |
Bristol Myers and Airsculpt Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Airsculpt Technologies
The main advantage of trading using opposite Bristol Myers and Airsculpt Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Airsculpt Technologies 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 Airsculpt Technologies will offset losses from the drop in Airsculpt Technologies' long position.| Bristol Myers vs. Capricor Therapeutics | Bristol Myers vs. Soleno Therapeutics | Bristol Myers vs. Bio Path Holdings | Bristol Myers vs. Moleculin Biotech |
| Airsculpt Technologies vs. Acadia Healthcare | Airsculpt Technologies vs. Pennant Group | Airsculpt Technologies vs. Amedisys | Airsculpt Technologies vs. The Ensign Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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