Correlation Between IShares Trust and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both IShares Trust 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 IShares Trust and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Bristol Myers Squibb, you can compare the effects of market volatilities on IShares Trust 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 IShares Trust with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Bristol Myers.
Diversification Opportunities for IShares Trust and Bristol Myers
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IShares and Bristol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust 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 IShares Trust 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 iShares Trust 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 IShares Trust i.e., IShares Trust and Bristol Myers go up and down completely randomly.
Pair Corralation between IShares Trust and Bristol Myers
If you would invest 304,000 in iShares Trust on September 2, 2024 and sell it today you would earn a total of 26,000 from holding iShares Trust or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
iShares Trust vs. Bristol Myers Squibb
Performance |
| Timeline |
| iShares Trust |
| Bristol Myers Squibb |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
IShares Trust and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Bristol Myers
The main advantage of trading using opposite IShares Trust and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust 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.| IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust | IShares Trust vs. iShares Trust |
| Bristol Myers vs. Verizon Communications | Bristol Myers vs. First Republic Bank | Bristol Myers vs. UnitedHealth Group Incorporated | Bristol Myers vs. Prudential Financial |
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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