Correlation Between Grupo Sports and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both Grupo Sports 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 Grupo Sports and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Sports World and Bristol Myers Squibb, you can compare the effects of market volatilities on Grupo Sports 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 Grupo Sports with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Sports and Bristol Myers.
Diversification Opportunities for Grupo Sports and Bristol Myers
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grupo and Bristol is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Sports World 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 Grupo Sports 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 Grupo Sports World 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 Grupo Sports i.e., Grupo Sports and Bristol Myers go up and down completely randomly.
Pair Corralation between Grupo Sports and Bristol Myers
Assuming the 90 days trading horizon Grupo Sports is expected to generate 6.57 times less return on investment than Bristol Myers. But when comparing it to its historical volatility, Grupo Sports World is 2.37 times less risky than Bristol Myers. It trades about 0.06 of its potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 110,500 in Bristol Myers Squibb on September 2, 2024 and sell it today you would earn a total of 11,700 from holding Bristol Myers Squibb or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Grupo Sports World vs. Bristol Myers Squibb
Performance |
| Timeline |
| Grupo Sports World |
| Bristol Myers Squibb |
Grupo Sports and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Sports and Bristol Myers
The main advantage of trading using opposite Grupo Sports and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Sports 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.| Grupo Sports vs. Monster Beverage Corp | Grupo Sports vs. DXC Technology | Grupo Sports vs. Grupo Carso SAB | Grupo Sports vs. Verizon Communications |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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