Correlation Between Coty and BRISTOL
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By analyzing existing cross correlation between Coty Inc and BRISTOL MYERS SQUIBB CO, you can compare the effects of market volatilities on Coty and BRISTOL 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 Coty with a short position of BRISTOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coty and BRISTOL.
Diversification Opportunities for Coty and BRISTOL
Very weak diversification
The 3 months correlation between Coty and BRISTOL is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Coty Inc and BRISTOL MYERS SQUIBB CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRISTOL MYERS SQUIBB and Coty 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 Coty Inc are associated (or correlated) with BRISTOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRISTOL MYERS SQUIBB has no effect on the direction of Coty i.e., Coty and BRISTOL go up and down completely randomly.
Pair Corralation between Coty and BRISTOL
Given the investment horizon of 90 days Coty is expected to generate 3099.5 times less return on investment than BRISTOL. But when comparing it to its historical volatility, Coty Inc is 25.89 times less risky than BRISTOL. It trades about 0.0 of its potential returns per unit of risk. BRISTOL MYERS SQUIBB CO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,904 in BRISTOL MYERS SQUIBB CO on September 13, 2024 and sell it today you would lose (39.00) from holding BRISTOL MYERS SQUIBB CO or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.74% |
| Values | Daily Returns |
Coty Inc vs. BRISTOL MYERS SQUIBB CO
Performance |
| Timeline |
| Coty Inc |
| BRISTOL MYERS SQUIBB |
Coty and BRISTOL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coty and BRISTOL
The main advantage of trading using opposite Coty and BRISTOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coty position performs unexpectedly, BRISTOL 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 BRISTOL will offset losses from the drop in BRISTOL's long position.The idea behind Coty Inc and BRISTOL MYERS SQUIBB CO 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.| BRISTOL vs. Here Media | BRISTOL vs. National CineMedia | BRISTOL vs. Sun Country Airlines | BRISTOL vs. Reservoir Media |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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