Correlation Between Bristol-Myers Squibb and Hop On
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Hop On 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 Hop On 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 Hop On Inc, you can compare the effects of market volatilities on Bristol-Myers Squibb and Hop On 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 Hop On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Hop On.
Diversification Opportunities for Bristol-Myers Squibb and Hop On
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bristol-Myers and Hop is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Hop On Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hop On Inc 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 Hop On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hop On Inc has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Hop On go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and Hop On
Assuming the 90 days horizon Bristol-Myers Squibb is expected to generate 59.18 times less return on investment than Hop On. But when comparing it to its historical volatility, Bristol Myers Squibb is 3.5 times less risky than Hop On. It trades about 0.0 of its potential returns per unit of risk. Hop On Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.07 in Hop On Inc on September 3, 2024 and sell it today you would earn a total of 0.01 from holding Hop On Inc or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 45.05% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Hop On Inc
Performance |
| Timeline |
| Bristol Myers Squibb |
| Hop On Inc |
Bristol-Myers Squibb and Hop On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and Hop On
The main advantage of trading using opposite Bristol-Myers Squibb and Hop On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Hop On 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 Hop On will offset losses from the drop in Hop On'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 |
| Hop On vs. Wialan Technologies | Hop On vs. Electronic Systems Technology | Hop On vs. AdvanceTC Limited | Hop On vs. Metalert |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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