Correlation Between Bristol Myers and NV Bekaert
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and NV Bekaert 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 NV Bekaert 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 NV Bekaert SA, you can compare the effects of market volatilities on Bristol Myers and NV Bekaert 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 NV Bekaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and NV Bekaert.
Diversification Opportunities for Bristol Myers and NV Bekaert
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and BEKAY is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and NV Bekaert SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV Bekaert SA 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 NV Bekaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Bekaert SA has no effect on the direction of Bristol Myers i.e., Bristol Myers and NV Bekaert go up and down completely randomly.
Pair Corralation between Bristol Myers and NV Bekaert
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the NV Bekaert. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 1.8 times less risky than NV Bekaert. The stock trades about -0.02 of its potential returns per unit of risk. The NV Bekaert SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 351.00 in NV Bekaert SA on September 3, 2024 and sell it today you would earn a total of 36.00 from holding NV Bekaert SA or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 61.62% |
| Values | Daily Returns |
Bristol Myers Squibb vs. NV Bekaert SA
Performance |
| Timeline |
| Bristol Myers Squibb |
| NV Bekaert SA |
Bristol Myers and NV Bekaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and NV Bekaert
The main advantage of trading using opposite Bristol Myers and NV Bekaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, NV Bekaert 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 NV Bekaert will offset losses from the drop in NV Bekaert's long position.| Bristol Myers vs. Pfizer Inc | Bristol Myers vs. Johnson Johnson | Bristol Myers vs. Highway Holdings Limited | Bristol Myers vs. QCR Holdings |
| NV Bekaert vs. Thyssenkrupp AG ON | NV Bekaert vs. Mueller Industries | NV Bekaert vs. Insteel Industries | NV Bekaert vs. Carpenter Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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