Correlation Between Bristol-Myers Squibb and Inland Real
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Inland Real 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 Inland Real 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 Inland Real Estateome, you can compare the effects of market volatilities on Bristol-Myers Squibb and Inland Real 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 Inland Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Inland Real.
Diversification Opportunities for Bristol-Myers Squibb and Inland Real
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bristol-Myers and Inland is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Inland Real Estateome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inland Real Estateome 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 Inland Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inland Real Estateome has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Inland Real go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and Inland Real
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 2.18 times more return on investment than Inland Real. However, Bristol-Myers Squibb is 2.18 times more volatile than Inland Real Estateome. It trades about 0.05 of its potential returns per unit of risk. Inland Real Estateome is currently generating about 0.0 per unit of risk. If you would invest 82,740 in Bristol Myers Squibb on August 26, 2024 and sell it today you would earn a total of 17,815 from holding Bristol Myers Squibb or generate 21.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 73.9% |
Values | Daily Returns |
Bristol Myers Squibb vs. Inland Real Estateome
Performance |
Timeline |
Bristol Myers Squibb |
Inland Real Estateome |
Bristol-Myers Squibb and Inland Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bristol-Myers Squibb and Inland Real
The main advantage of trading using opposite Bristol-Myers Squibb and Inland Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Inland Real 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 Inland Real will offset losses from the drop in Inland Real'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 |
Inland Real vs. Global Net Lease, | Inland Real vs. Brightspire Capital | Inland Real vs. NexPoint Strategic Opportunities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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