Correlation Between Fortinet and Bristol-Myers Squibb
Can any of the company-specific risk be diversified away by investing in both Fortinet and Bristol-Myers Squibb 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 Fortinet and Bristol-Myers Squibb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortinet and Bristol Myers Squibb, you can compare the effects of market volatilities on Fortinet and Bristol-Myers Squibb 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 Fortinet with a short position of Bristol-Myers Squibb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortinet and Bristol-Myers Squibb.
Diversification Opportunities for Fortinet and Bristol-Myers Squibb
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fortinet and Bristol-Myers is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Fortinet 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 Fortinet 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 Fortinet are associated (or correlated) with Bristol-Myers Squibb. 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 Fortinet i.e., Fortinet and Bristol-Myers Squibb go up and down completely randomly.
Pair Corralation between Fortinet and Bristol-Myers Squibb
Given the investment horizon of 90 days Fortinet is expected to generate 0.65 times more return on investment than Bristol-Myers Squibb. However, Fortinet is 1.55 times less risky than Bristol-Myers Squibb. It trades about 0.11 of its potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.04 per unit of risk. If you would invest 5,364 in Fortinet on September 4, 2024 and sell it today you would earn a total of 4,165 from holding Fortinet or generate 77.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 76.11% |
| Values | Daily Returns |
Fortinet vs. Bristol Myers Squibb
Performance |
| Timeline |
| Fortinet |
| Bristol Myers Squibb |
Fortinet and Bristol-Myers Squibb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortinet and Bristol-Myers Squibb
The main advantage of trading using opposite Fortinet and Bristol-Myers Squibb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortinet position performs unexpectedly, Bristol-Myers Squibb 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 Squibb will offset losses from the drop in Bristol-Myers Squibb's long position.| Fortinet vs. Palo Alto Networks | Fortinet vs. Uipath Inc | Fortinet vs. Block Inc | Fortinet vs. Adobe Systems Incorporated |
| 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 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |