Correlation Between Bristol Myers and Avid Bioservices
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Avid Bioservices 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 Avid Bioservices 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 Avid Bioservices, you can compare the effects of market volatilities on Bristol Myers and Avid Bioservices 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 Avid Bioservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Avid Bioservices.
Diversification Opportunities for Bristol Myers and Avid Bioservices
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bristol and Avid is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Avid Bioservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avid Bioservices 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 Avid Bioservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avid Bioservices has no effect on the direction of Bristol Myers i.e., Bristol Myers and Avid Bioservices go up and down completely randomly.
Pair Corralation between Bristol Myers and Avid Bioservices
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 8.76 times more return on investment than Avid Bioservices. However, Bristol Myers is 8.76 times more volatile than Avid Bioservices. It trades about 0.04 of its potential returns per unit of risk. Avid Bioservices is currently generating about 0.25 per unit of risk. If you would invest 5,681 in Bristol Myers Squibb on November 9, 2024 and sell it today you would earn a total of 61.00 from holding Bristol Myers Squibb or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Avid Bioservices
Performance |
| Timeline |
| Bristol Myers Squibb |
| Avid Bioservices |
Bristol Myers and Avid Bioservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Avid Bioservices
The main advantage of trading using opposite Bristol Myers and Avid Bioservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Avid Bioservices 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 Avid Bioservices will offset losses from the drop in Avid Bioservices' long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Avid Bioservices vs. Anebulo Pharmaceuticals | Avid Bioservices vs. Adagene | Avid Bioservices vs. Acrivon Therapeutics, Common | Avid Bioservices vs. AnaptysBio |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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