Correlation Between Bristol Myers and Check Cap
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Check Cap 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 Check Cap 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 Check Cap, you can compare the effects of market volatilities on Bristol Myers and Check Cap 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 Check Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Check Cap.
Diversification Opportunities for Bristol Myers and Check Cap
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and Check is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap 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 Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of Bristol Myers i.e., Bristol Myers and Check Cap go up and down completely randomly.
Pair Corralation between Bristol Myers and Check Cap
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.26 times more return on investment than Check Cap. However, Bristol Myers Squibb is 3.84 times less risky than Check Cap. It trades about -0.01 of its potential returns per unit of risk. Check Cap is currently generating about -0.01 per unit of risk. If you would invest 6,763 in Bristol Myers Squibb on August 28, 2024 and sell it today you would lose (889.00) from holding Bristol Myers Squibb or give up 13.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Check Cap
Performance |
| Timeline |
| Bristol Myers Squibb |
| Check Cap |
Bristol Myers and Check Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Check Cap
The main advantage of trading using opposite Bristol Myers and Check Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Check Cap 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 Check Cap will offset losses from the drop in Check Cap's long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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