Correlation Between TechnipFMC PLC and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both TechnipFMC PLC 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 TechnipFMC PLC and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TechnipFMC PLC and Bristol Myers Squibb, you can compare the effects of market volatilities on TechnipFMC PLC 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 TechnipFMC PLC with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of TechnipFMC PLC and Bristol Myers.
Diversification Opportunities for TechnipFMC PLC and Bristol Myers
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TechnipFMC and Bristol is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding TechnipFMC PLC 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 TechnipFMC PLC 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 TechnipFMC PLC 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 TechnipFMC PLC i.e., TechnipFMC PLC and Bristol Myers go up and down completely randomly.
Pair Corralation between TechnipFMC PLC and Bristol Myers
Considering the 90-day investment horizon TechnipFMC PLC is expected to generate 1.46 times more return on investment than Bristol Myers. However, TechnipFMC PLC is 1.46 times more volatile than Bristol Myers Squibb. It trades about 0.27 of its potential returns per unit of risk. Bristol Myers Squibb is currently generating about -0.14 per unit of risk. If you would invest 2,819 in TechnipFMC PLC on September 14, 2024 and sell it today you would earn a total of 269.00 from holding TechnipFMC PLC or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TechnipFMC PLC vs. Bristol Myers Squibb
Performance |
| Timeline |
| TechnipFMC PLC |
| Bristol Myers Squibb |
TechnipFMC PLC and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TechnipFMC PLC and Bristol Myers
The main advantage of trading using opposite TechnipFMC PLC and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TechnipFMC PLC 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.| TechnipFMC PLC vs. Tenaris SA ADR | TechnipFMC PLC vs. Dawson Geophysical | TechnipFMC PLC vs. Bristow Group | TechnipFMC PLC vs. Enerflex |
| Bristol Myers vs. Novartis AG | Bristol Myers vs. Bayer AG | Bristol Myers vs. Astellas Pharma | Bristol Myers vs. Roche Holding AG |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |