Correlation Between GMxico Transportes and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes 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 GMxico Transportes and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Bristol Myers Squibb, you can compare the effects of market volatilities on GMxico Transportes 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 GMxico Transportes with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Bristol Myers.
Diversification Opportunities for GMxico Transportes and Bristol Myers
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GMxico and Bristol is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB 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 GMxico Transportes 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 GMxico Transportes SAB 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 GMxico Transportes i.e., GMxico Transportes and Bristol Myers go up and down completely randomly.
Pair Corralation between GMxico Transportes and Bristol Myers
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to under-perform the Bristol Myers. In addition to that, GMxico Transportes is 1.35 times more volatile than Bristol Myers Squibb. It trades about -0.04 of its total potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.07 per unit of volatility. If you would invest 113,794 in Bristol Myers Squibb on October 20, 2024 and sell it today you would earn a total of 1,726 from holding Bristol Myers Squibb or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Bristol Myers Squibb
Performance |
| Timeline |
| GMxico Transportes SAB |
| Bristol Myers Squibb |
GMxico Transportes and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Bristol Myers
The main advantage of trading using opposite GMxico Transportes and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes 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.| GMxico Transportes vs. Samsung Electronics Co | GMxico Transportes vs. Cognizant Technology Solutions | GMxico Transportes vs. Genworth Financial | GMxico Transportes vs. Micron Technology |
| Bristol Myers vs. Eli Lilly and | Bristol Myers vs. Roche Holding AG | Bristol Myers vs. Amgen Inc | Bristol Myers vs. Sanofi |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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