Correlation Between Bristol-Myers Squibb and Green Shift
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Green Shift 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 Green Shift 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 Green Shift Commodities, you can compare the effects of market volatilities on Bristol-Myers Squibb and Green Shift 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 Green Shift. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Green Shift.
Diversification Opportunities for Bristol-Myers Squibb and Green Shift
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bristol-Myers and Green is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Green Shift Commodities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Shift Commodities 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 Green Shift. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Shift Commodities has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Green Shift go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and Green Shift
Assuming the 90 days horizon Bristol Myers Squibb is expected to under-perform the Green Shift. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 2.66 times less risky than Green Shift. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Green Shift Commodities is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8.37 in Green Shift Commodities on December 1, 2024 and sell it today you would lose (5.23) from holding Green Shift Commodities or give up 62.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.19% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Green Shift Commodities
Performance |
| Timeline |
| Bristol Myers Squibb |
| Green Shift Commodities |
Bristol-Myers Squibb and Green Shift Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and Green Shift
The main advantage of trading using opposite Bristol-Myers Squibb and Green Shift positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Green Shift 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 Green Shift will offset losses from the drop in Green Shift'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 |
| Green Shift vs. LB Foster | Green Shift vs. AKITA Drilling | Green Shift vs. Integrated Drilling Equipment | Green Shift vs. Sunlands Technology Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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