Correlation Between Bristol-Myers Squibb and INFICON Holding
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and INFICON Holding 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 INFICON Holding 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 INFICON Holding AG, you can compare the effects of market volatilities on Bristol-Myers Squibb and INFICON Holding 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 INFICON Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and INFICON Holding.
Diversification Opportunities for Bristol-Myers Squibb and INFICON Holding
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bristol-Myers and INFICON is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and INFICON Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFICON Holding AG 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 INFICON Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFICON Holding AG has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and INFICON Holding go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and INFICON Holding
If you would invest 90,051 in Bristol Myers Squibb on September 4, 2024 and sell it today you would earn a total of 10,504 from holding Bristol Myers Squibb or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. INFICON Holding AG
Performance |
| Timeline |
| Bristol Myers Squibb |
| INFICON Holding AG |
Bristol-Myers Squibb and INFICON Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and INFICON Holding
The main advantage of trading using opposite Bristol-Myers Squibb and INFICON Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, INFICON Holding 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 INFICON Holding will offset losses from the drop in INFICON Holding'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 |
| INFICON Holding vs. CVW CleanTech | INFICON Holding vs. Merit Medical Systems | INFICON Holding vs. Pool Corporation | INFICON Holding vs. Northstar Clean Technologies |
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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