Correlation Between First Republic and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both First Republic and Bristol Myers 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 First Republic and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Republic Bank and Bristol Myers Squibb, you can compare the effects of market volatilities on First Republic and Bristol Myers 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 First Republic with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Bristol Myers.
Diversification Opportunities for First Republic and Bristol Myers
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Bristol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Bristol Myers Squibb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristol Myers Squibb and First Republic 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 First Republic Bank are associated (or correlated) with Bristol Myers. 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 First Republic i.e., First Republic and Bristol Myers go up and down completely randomly.
Pair Corralation between First Republic and Bristol Myers
If you would invest 70,532 in Bristol Myers Squibb on September 3, 2024 and sell it today you would earn a total of 51,668 from holding Bristol Myers Squibb or generate 73.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
First Republic Bank vs. Bristol Myers Squibb
Performance |
| Timeline |
| First Republic Bank |
| Bristol Myers Squibb |
First Republic and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Bristol Myers
The main advantage of trading using opposite First Republic and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic position performs unexpectedly, Bristol Myers 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 Myers will offset losses from the drop in Bristol Myers' long position.| First Republic vs. Grupo Financiero Banorte | First Republic vs. Grupo Financiero Inbursa | First Republic vs. Banco del Bajo |
| Bristol Myers vs. Eli Lilly and | Bristol Myers vs. Merck Company | Bristol Myers vs. Roche Holding AG | Bristol Myers vs. Amgen Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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