Correlation Between Luye Pharma and Bristol-Myers Squibb
Can any of the company-specific risk be diversified away by investing in both Luye Pharma 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 Luye Pharma 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 Luye Pharma Group and Bristol Myers Squibb, you can compare the effects of market volatilities on Luye Pharma 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 Luye Pharma with a short position of Bristol-Myers Squibb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luye Pharma and Bristol-Myers Squibb.
Diversification Opportunities for Luye Pharma and Bristol-Myers Squibb
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Luye and Bristol-Myers is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Luye Pharma Group 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 Luye Pharma 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 Luye Pharma Group 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 Luye Pharma i.e., Luye Pharma and Bristol-Myers Squibb go up and down completely randomly.
Pair Corralation between Luye Pharma and Bristol-Myers Squibb
If you would invest 34.00 in Luye Pharma Group on November 1, 2024 and sell it today you would earn a total of 0.00 from holding Luye Pharma Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Luye Pharma Group vs. Bristol Myers Squibb
Performance |
| Timeline |
| Luye Pharma Group |
| Bristol Myers Squibb |
Luye Pharma and Bristol-Myers Squibb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luye Pharma and Bristol-Myers Squibb
The main advantage of trading using opposite Luye Pharma and Bristol-Myers Squibb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luye Pharma 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.| Luye Pharma vs. Amgen Inc | Luye Pharma vs. Bristol Myers Squibb | Luye Pharma vs. Roche Holding AG | Luye Pharma vs. Novartis AG |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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