Correlation Between Bristol-Myers Squibb and Sanofi ADR

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Sanofi ADR 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 Sanofi ADR 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 Sanofi ADR, you can compare the effects of market volatilities on Bristol-Myers Squibb and Sanofi ADR 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 Sanofi ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Sanofi ADR.

Diversification Opportunities for Bristol-Myers Squibb and Sanofi ADR

Bristol-MyersSanofiDiversified AwayBristol-MyersSanofiDiversified Away100%
0.6
  Correlation Coefficient

Poor diversification

The 3 months correlation between Bristol-Myers and Sanofi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Sanofi ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi ADR 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 Sanofi ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi ADR has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Sanofi ADR go up and down completely randomly.

Pair Corralation between Bristol-Myers Squibb and Sanofi ADR

Assuming the 90 days horizon Bristol Myers Squibb is expected to under-perform the Sanofi ADR. In addition to that, Bristol-Myers Squibb is 3.43 times more volatile than Sanofi ADR. It trades about -0.08 of its total potential returns per unit of risk. Sanofi ADR is currently generating about 0.21 per unit of volatility. If you would invest  5,151  in Sanofi ADR on November 23, 2024 and sell it today you would earn a total of  295.00  from holding Sanofi ADR or generate 5.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy50.0%
ValuesDaily Returns

Bristol Myers Squibb  vs.  Sanofi ADR

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15BMYMP SNY
       Timeline  
Bristol Myers Squibb 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Bristol Myers Squibb has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15MayJulSepNovJanJulSepNovJan7008009001,0001,1001,200
Sanofi ADR 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sanofi ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Sanofi ADR showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb46474849505152535455

Bristol-Myers Squibb and Sanofi ADR Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-20.94-15.69-10.43-5.170.05.0810.4215.7721.1126.46 0.050.100.15
JavaScript chart by amCharts 3.21.15BMYMP SNY
       Returns  

Pair Trading with Bristol-Myers Squibb and Sanofi ADR

The main advantage of trading using opposite Bristol-Myers Squibb and Sanofi ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Sanofi ADR 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 Sanofi ADR will offset losses from the drop in Sanofi ADR's long position.
The idea behind Bristol Myers Squibb and Sanofi ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Commodity Directory
Find actively traded commodities issued by global exchanges
Money Managers
Screen money managers from public funds and ETFs managed around the world
CEOs Directory
Screen CEOs from public companies around the world
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing