Correlation Between Bristol Myers and Roche Holding
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Roche Holding 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 Roche Holding 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 Roche Holding Ltd, you can compare the effects of market volatilities on Bristol Myers and Roche Holding 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 Roche Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Roche Holding.
Diversification Opportunities for Bristol Myers and Roche Holding
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol and Roche is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Roche Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Holding 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 Roche Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Holding has no effect on the direction of Bristol Myers i.e., Bristol Myers and Roche Holding go up and down completely randomly.
Pair Corralation between Bristol Myers and Roche Holding
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 2.89 times more return on investment than Roche Holding. However, Bristol Myers is 2.89 times more volatile than Roche Holding Ltd. It trades about 0.21 of its potential returns per unit of risk. Roche Holding Ltd is currently generating about -0.6 per unit of risk. If you would invest 5,192 in Bristol Myers Squibb on August 26, 2024 and sell it today you would earn a total of 695.00 from holding Bristol Myers Squibb or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Roche Holding Ltd
Performance |
| Timeline |
| Bristol Myers Squibb |
| Roche Holding |
Bristol Myers and Roche Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Roche Holding
The main advantage of trading using opposite Bristol Myers and Roche Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Roche Holding 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 Roche Holding will offset losses from the drop in Roche Holding's long position.| Bristol Myers vs. Capricor Therapeutics | Bristol Myers vs. Soleno Therapeutics | Bristol Myers vs. Bio Path Holdings | Bristol Myers vs. Moleculin Biotech |
| Roche Holding vs. Sanofi ADR | Roche Holding vs. AstraZeneca PLC ADR | Roche Holding vs. GlaxoSmithKline PLC ADR | Roche Holding vs. Merck Company |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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