Correlation Between Bristol Myers and Simulations Plus
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Simulations Plus 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 Simulations Plus 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 Simulations Plus, you can compare the effects of market volatilities on Bristol Myers and Simulations Plus 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 Simulations Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Simulations Plus.
Diversification Opportunities for Bristol Myers and Simulations Plus
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bristol and Simulations is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus 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 Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of Bristol Myers i.e., Bristol Myers and Simulations Plus go up and down completely randomly.
Pair Corralation between Bristol Myers and Simulations Plus
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Simulations Plus. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 1.77 times less risky than Simulations Plus. The stock trades about -0.02 of its potential returns per unit of risk. The Simulations Plus is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,935 in Simulations Plus on September 3, 2024 and sell it today you would lose (758.00) from holding Simulations Plus or give up 19.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Simulations Plus
Performance |
| Timeline |
| Bristol Myers Squibb |
| Simulations Plus |
Bristol Myers and Simulations Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Simulations Plus
The main advantage of trading using opposite Bristol Myers and Simulations Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Simulations Plus 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 Simulations Plus will offset losses from the drop in Simulations Plus' long position.| Bristol Myers vs. Pfizer Inc | Bristol Myers vs. Johnson Johnson | Bristol Myers vs. Highway Holdings Limited | Bristol Myers vs. QCR Holdings |
| Simulations Plus vs. Definitive Healthcare Corp | Simulations Plus vs. National Research Corp | Simulations Plus vs. Evolent Health | Simulations Plus vs. Privia Health Group |
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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