Correlation Between Bristol Myers and PT Kalbe
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and PT Kalbe 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 PT Kalbe 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 PT Kalbe Farma, you can compare the effects of market volatilities on Bristol Myers and PT Kalbe 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 PT Kalbe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and PT Kalbe.
Diversification Opportunities for Bristol Myers and PT Kalbe
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bristol and PTKFF is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and PT Kalbe Farma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Kalbe Farma 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 PT Kalbe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Kalbe Farma has no effect on the direction of Bristol Myers i.e., Bristol Myers and PT Kalbe go up and down completely randomly.
Pair Corralation between Bristol Myers and PT Kalbe
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 1.02 times more return on investment than PT Kalbe. However, Bristol Myers is 1.02 times more volatile than PT Kalbe Farma. It trades about 0.18 of its potential returns per unit of risk. PT Kalbe Farma is currently generating about -0.21 per unit of risk. If you would invest 5,264 in Bristol Myers Squibb on August 29, 2024 and sell it today you would earn a total of 610.00 from holding Bristol Myers Squibb or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. PT Kalbe Farma
Performance |
| Timeline |
| Bristol Myers Squibb |
| PT Kalbe Farma |
Bristol Myers and PT Kalbe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and PT Kalbe
The main advantage of trading using opposite Bristol Myers and PT Kalbe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, PT Kalbe 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 PT Kalbe will offset losses from the drop in PT Kalbe's long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| PT Kalbe vs. Sanofi ADR | PT Kalbe vs. Bristol Myers Squibb | PT Kalbe vs. AstraZeneca PLC ADR | PT Kalbe vs. Gilead Sciences |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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