Correlation Between Bristol-Myers Squibb and Stallion Discoveries
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Stallion Discoveries 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 Stallion Discoveries 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 Stallion Discoveries Corp, you can compare the effects of market volatilities on Bristol-Myers Squibb and Stallion Discoveries 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 Stallion Discoveries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Stallion Discoveries.
Diversification Opportunities for Bristol-Myers Squibb and Stallion Discoveries
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol-Myers and Stallion is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Stallion Discoveries Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stallion Discoveries Corp 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 Stallion Discoveries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stallion Discoveries Corp has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Stallion Discoveries go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and Stallion Discoveries
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 0.4 times more return on investment than Stallion Discoveries. However, Bristol Myers Squibb is 2.53 times less risky than Stallion Discoveries. It trades about 0.04 of its potential returns per unit of risk. Stallion Discoveries Corp is currently generating about -0.03 per unit of risk. If you would invest 86,229 in Bristol Myers Squibb on September 3, 2024 and sell it today you would earn a total of 14,326 from holding Bristol Myers Squibb or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 75.71% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Stallion Discoveries Corp
Performance |
| Timeline |
| Bristol Myers Squibb |
| Stallion Discoveries Corp |
Bristol-Myers Squibb and Stallion Discoveries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and Stallion Discoveries
The main advantage of trading using opposite Bristol-Myers Squibb and Stallion Discoveries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Stallion Discoveries 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 Stallion Discoveries will offset losses from the drop in Stallion Discoveries' 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 |
| Stallion Discoveries vs. Chester Mining | Stallion Discoveries vs. Jacobs Solutions | Stallion Discoveries vs. Inflection Point Acquisition | Stallion Discoveries vs. Aldel Financial II |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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