Correlation Between Bristol-Myers Squibb and Agfa-Gevaert
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Agfa-Gevaert 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 Agfa-Gevaert 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 Agfa Gevaert NV, you can compare the effects of market volatilities on Bristol-Myers Squibb and Agfa-Gevaert 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 Agfa-Gevaert. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Agfa-Gevaert.
Diversification Opportunities for Bristol-Myers Squibb and Agfa-Gevaert
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol-Myers and Agfa-Gevaert is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Agfa Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agfa Gevaert NV 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 Agfa-Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agfa Gevaert NV has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Agfa-Gevaert go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and Agfa-Gevaert
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 1.54 times more return on investment than Agfa-Gevaert. However, Bristol-Myers Squibb is 1.54 times more volatile than Agfa Gevaert NV. It trades about 0.0 of its potential returns per unit of risk. Agfa Gevaert NV is currently generating about -0.09 per unit of risk. If you would invest 117,420 in Bristol Myers Squibb on September 3, 2024 and sell it today you would lose (16,865) from holding Bristol Myers Squibb or give up 14.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 45.05% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Agfa Gevaert NV
Performance |
| Timeline |
| Bristol Myers Squibb |
| Agfa Gevaert NV |
Bristol-Myers Squibb and Agfa-Gevaert Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and Agfa-Gevaert
The main advantage of trading using opposite Bristol-Myers Squibb and Agfa-Gevaert positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Agfa-Gevaert 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 Agfa-Gevaert will offset losses from the drop in Agfa-Gevaert's long position.| Bristol-Myers Squibb vs. Novartis AG | Bristol-Myers Squibb vs. Bayer AG | Bristol-Myers Squibb vs. Astellas Pharma | Bristol-Myers Squibb vs. Roche Holding AG |
| Agfa-Gevaert vs. Enerpac Tool Group | Agfa-Gevaert vs. Omega Flex | Agfa-Gevaert vs. Luxfer Holdings PLC | Agfa-Gevaert vs. Gorman Rupp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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