Correlation Between Bristol-Myers Squibb and CK Asset
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and CK Asset 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 CK Asset 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 CK Asset Holdings, you can compare the effects of market volatilities on Bristol-Myers Squibb and CK Asset 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 CK Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and CK Asset.
Diversification Opportunities for Bristol-Myers Squibb and CK Asset
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bristol-Myers and CHKGF is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and CK Asset Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Asset Holdings 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 CK Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Asset Holdings has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and CK Asset go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and CK Asset
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 1.28 times more return on investment than CK Asset. However, Bristol-Myers Squibb is 1.28 times more volatile than CK Asset Holdings. It trades about 0.04 of its potential returns per unit of risk. CK Asset Holdings is currently generating about -0.04 per unit of risk. If you would invest 86,229 in Bristol Myers Squibb on August 29, 2024 and sell it today you would earn a total of 14,326 from holding Bristol Myers Squibb or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.58% |
| Values | Daily Returns |
Bristol Myers Squibb vs. CK Asset Holdings
Performance |
| Timeline |
| Bristol Myers Squibb |
| CK Asset Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Bristol-Myers Squibb and CK Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and CK Asset
The main advantage of trading using opposite Bristol-Myers Squibb and CK Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, CK Asset 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 CK Asset will offset losses from the drop in CK Asset'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 |
| CK Asset vs. Hong Kong Land | CK Asset vs. Sino Land Co | CK Asset vs. CK Hutchison Holdings | CK Asset vs. CK Hutchison Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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