Correlation Between Bristol-Myers Squibb and Apple

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Apple 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 Squibb and Apple 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 Apple Inc, you can compare the effects of market volatilities on Bristol-Myers Squibb and Apple 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 Squibb with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Apple.

Diversification Opportunities for Bristol-Myers Squibb and Apple

Bristol-MyersAppleDiversified AwayBristol-MyersAppleDiversified Away100%
-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bristol-Myers and Apple is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and Bristol-Myers Squibb 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Apple go up and down completely randomly.

Pair Corralation between Bristol-Myers Squibb and Apple

Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 3.53 times more return on investment than Apple. However, Bristol-Myers Squibb is 3.53 times more volatile than Apple Inc. It trades about 0.09 of its potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of risk. If you would invest  97,800  in Bristol Myers Squibb on December 8, 2024 and sell it today you would earn a total of  7,200  from holding Bristol Myers Squibb or generate 7.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Bristol Myers Squibb  vs.  Apple Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 010203040
JavaScript chart by amCharts 3.21.15BMYMP AAPL
       Timeline  
Bristol Myers Squibb 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile primary indicators, Bristol-Myers Squibb reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JulAugSepOctNovDecJanFebMar SepOctNovDecJanFebMar8009001,0001,1001,200
Apple Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Apple is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar220225230235240245250255260

Bristol-Myers Squibb and Apple Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-19.81-14.84-9.86-4.890.05.0310.2315.4320.6325.83 0.050.100.15
JavaScript chart by amCharts 3.21.15BMYMP AAPL
       Returns  

Pair Trading with Bristol-Myers Squibb and Apple

The main advantage of trading using opposite Bristol-Myers Squibb and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind Bristol Myers Squibb and Apple Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Fundamental Analysis
View fundamental data based on most recent published financial statements
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Insider Screener
Find insiders across different sectors to evaluate their impact on performance