Correlation Between Bristol-Myers Squibb and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and AstraZeneca PLC 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 AstraZeneca PLC 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 AstraZeneca PLC, you can compare the effects of market volatilities on Bristol-Myers Squibb and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and AstraZeneca PLC.
Diversification Opportunities for Bristol-Myers Squibb and AstraZeneca PLC
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol-Myers and AstraZeneca is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and AstraZeneca PLC
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 1.77 times more return on investment than AstraZeneca PLC. However, Bristol-Myers Squibb is 1.77 times more volatile than AstraZeneca PLC. It trades about 0.05 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about 0.02 per unit of risk. If you would invest 82,740 in Bristol Myers Squibb on August 24, 2024 and sell it today you would earn a total of 17,815 from holding Bristol Myers Squibb or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.8% |
| Values | Daily Returns |
Bristol Myers Squibb vs. AstraZeneca PLC
Performance |
| Timeline |
| Bristol Myers Squibb |
| AstraZeneca PLC |
Bristol-Myers Squibb and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and AstraZeneca PLC
The main advantage of trading using opposite Bristol-Myers Squibb and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC'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 |
| AstraZeneca PLC vs. Roche Holding AG | AstraZeneca PLC vs. Roche Holding AG | AstraZeneca PLC vs. Roche Holding Ltd | AstraZeneca PLC vs. Grifols SA ADR |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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