Correlation Between Grifols SA and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both Grifols SA 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 Grifols SA and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grifols SA ADR and Bristol Myers Squibb, you can compare the effects of market volatilities on Grifols SA 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 Grifols SA with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grifols SA and Bristol Myers.
Diversification Opportunities for Grifols SA and Bristol Myers
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grifols and Bristol is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Grifols SA ADR 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 Grifols SA 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 Grifols SA ADR 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 Grifols SA i.e., Grifols SA and Bristol Myers go up and down completely randomly.
Pair Corralation between Grifols SA and Bristol Myers
Given the investment horizon of 90 days Grifols SA is expected to generate 6.55 times less return on investment than Bristol Myers. In addition to that, Grifols SA is 1.38 times more volatile than Bristol Myers Squibb. It trades about 0.02 of its total potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.17 per unit of volatility. If you would invest 4,771 in Bristol Myers Squibb on August 26, 2024 and sell it today you would earn a total of 1,116 from holding Bristol Myers Squibb or generate 23.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grifols SA ADR vs. Bristol Myers Squibb
Performance |
| Timeline |
| Grifols SA ADR |
| Bristol Myers Squibb |
Grifols SA and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grifols SA and Bristol Myers
The main advantage of trading using opposite Grifols SA and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grifols SA 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.| Grifols SA vs. Novartis AG ADR | Grifols SA vs. AstraZeneca PLC ADR | Grifols SA vs. GlaxoSmithKline PLC ADR | Grifols SA vs. Roche Holding Ltd |
| Bristol Myers vs. Capricor Therapeutics | Bristol Myers vs. Soleno Therapeutics | Bristol Myers vs. Bio Path Holdings | Bristol Myers vs. Moleculin Biotech |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |