Correlation Between Bristol-Myers Squibb and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Development, you can compare the effects of market volatilities on Bristol-Myers Squibb and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and COSCO SHIPPING.
Diversification Opportunities for Bristol-Myers Squibb and COSCO SHIPPING
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bristol-Myers and COSCO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and COSCO SHIPPING Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Devel 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Devel has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and COSCO SHIPPING
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 1.69 times more return on investment than COSCO SHIPPING. However, Bristol-Myers Squibb is 1.69 times more volatile than COSCO SHIPPING Development. It trades about 0.05 of its potential returns per unit of risk. COSCO SHIPPING Development is currently generating about -0.06 per unit of risk. If you would invest 89,885 in Bristol Myers Squibb on August 27, 2024 and sell it today you would earn a total of 10,670 from holding Bristol Myers Squibb or generate 11.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.24% |
| Values | Daily Returns |
Bristol Myers Squibb vs. COSCO SHIPPING Development
Performance |
| Timeline |
| Bristol Myers Squibb |
| COSCO SHIPPING Devel |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bristol-Myers Squibb and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and COSCO SHIPPING
The main advantage of trading using opposite Bristol-Myers Squibb and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING'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 |
| COSCO SHIPPING vs. SITC International Holdings | COSCO SHIPPING vs. Orient Overseas Limited | COSCO SHIPPING vs. COSCO SHIPPING Holdings | COSCO SHIPPING vs. Pacific Basin Shipping |
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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