Correlation Between Highway Holdings and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both Highway Holdings 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 Highway Holdings and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and Bristol Myers Squibb, you can compare the effects of market volatilities on Highway Holdings 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 Highway Holdings with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Bristol Myers.
Diversification Opportunities for Highway Holdings and Bristol Myers
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highway and Bristol is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited 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 Highway Holdings 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 Highway Holdings Limited 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 Highway Holdings i.e., Highway Holdings and Bristol Myers go up and down completely randomly.
Pair Corralation between Highway Holdings and Bristol Myers
Given the investment horizon of 90 days Highway Holdings is expected to generate 1.22 times less return on investment than Bristol Myers. In addition to that, Highway Holdings is 1.41 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 0.03 per unit of volatility. If you would invest 5,368 in Bristol Myers Squibb on September 4, 2024 and sell it today you would earn a total of 626.00 from holding Bristol Myers Squibb or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.31% |
| Values | Daily Returns |
Highway Holdings Limited vs. Bristol Myers Squibb
Performance |
| Timeline |
| Highway Holdings |
| Bristol Myers Squibb |
Highway Holdings and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Bristol Myers
The main advantage of trading using opposite Highway Holdings and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings 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.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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