Correlation Between Scottie Resources and Bristol-Myers Squibb
Can any of the company-specific risk be diversified away by investing in both Scottie Resources 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 Scottie Resources 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 Scottie Resources Corp and Bristol Myers Squibb, you can compare the effects of market volatilities on Scottie Resources 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 Scottie Resources with a short position of Bristol-Myers Squibb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scottie Resources and Bristol-Myers Squibb.
Diversification Opportunities for Scottie Resources and Bristol-Myers Squibb
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scottie and Bristol-Myers is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Scottie Resources Corp 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 Scottie Resources 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 Scottie Resources Corp 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 Scottie Resources i.e., Scottie Resources and Bristol-Myers Squibb go up and down completely randomly.
Pair Corralation between Scottie Resources and Bristol-Myers Squibb
Assuming the 90 days horizon Scottie Resources is expected to generate 1.29 times less return on investment than Bristol-Myers Squibb. In addition to that, Scottie Resources is 1.6 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 0.04 per unit of volatility. If you would invest 86,229 in Bristol Myers Squibb on September 2, 2024 and sell it today you would earn a total of 14,326 from holding Bristol Myers Squibb or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.4% |
| Values | Daily Returns |
Scottie Resources Corp vs. Bristol Myers Squibb
Performance |
| Timeline |
| Scottie Resources Corp |
| Bristol Myers Squibb |
Scottie Resources and Bristol-Myers Squibb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scottie Resources and Bristol-Myers Squibb
The main advantage of trading using opposite Scottie Resources and Bristol-Myers Squibb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scottie Resources 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.| Scottie Resources vs. HUMANA INC | Scottie Resources vs. SCOR PK | Scottie Resources vs. Aquagold International | Scottie Resources vs. Thrivent High Yield |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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