Correlation Between Bristol Myers and First Community
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and First Community 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 and First Community 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 First Community Financial, you can compare the effects of market volatilities on Bristol Myers and First Community 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 with a short position of First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and First Community.
Diversification Opportunities for Bristol Myers and First Community
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bristol and First is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and First Community Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community Financial and Bristol Myers 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community Financial has no effect on the direction of Bristol Myers i.e., Bristol Myers and First Community go up and down completely randomly.
Pair Corralation between Bristol Myers and First Community
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 0.7 times more return on investment than First Community. However, Bristol Myers Squibb is 1.42 times less risky than First Community. It trades about -0.22 of its potential returns per unit of risk. First Community Financial is currently generating about -0.23 per unit of risk. If you would invest 99,889 in Bristol Myers Squibb on October 20, 2024 and sell it today you would lose (6,367) from holding Bristol Myers Squibb or give up 6.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bristol Myers Squibb vs. First Community Financial
Performance |
| Timeline |
| Bristol Myers Squibb |
| First Community Financial |
Bristol Myers and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and First Community
The main advantage of trading using opposite Bristol Myers and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, First Community 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 First Community will offset losses from the drop in First Community's long position.| Bristol Myers vs. Novartis AG | Bristol Myers vs. Bayer AG | Bristol Myers vs. Astellas Pharma | Bristol Myers vs. Roche Holding AG |
| First Community vs. CCSB Financial Corp | First Community vs. Bank of Utica | First Community vs. BEO Bancorp | First Community vs. First Community |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| 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 | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| CEOs Directory Screen CEOs from public companies around the world |