Correlation Between 90331HPL1 and Bristol-Myers Squibb
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By analyzing existing cross correlation between US BANK NATIONAL and Bristol Myers Squibb, you can compare the effects of market volatilities on 90331HPL1 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 90331HPL1 with a short position of Bristol-Myers Squibb. Check out your portfolio center. Please also check ongoing floating volatility patterns of 90331HPL1 and Bristol-Myers Squibb.
Diversification Opportunities for 90331HPL1 and Bristol-Myers Squibb
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 90331HPL1 and Bristol-Myers is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding US BANK NATIONAL 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 90331HPL1 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 US BANK NATIONAL 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 90331HPL1 i.e., 90331HPL1 and Bristol-Myers Squibb go up and down completely randomly.
Pair Corralation between 90331HPL1 and Bristol-Myers Squibb
Assuming the 90 days trading horizon US BANK NATIONAL is expected to under-perform the Bristol-Myers Squibb. But the bond apears to be less risky and, when comparing its historical volatility, US BANK NATIONAL is 3.36 times less risky than Bristol-Myers Squibb. The bond trades about -0.2 of its potential returns per unit of risk. The Bristol Myers Squibb is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 84,500 in Bristol Myers Squibb on August 31, 2024 and sell it today you would earn a total of 16,055 from holding Bristol Myers Squibb or generate 19.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
US BANK NATIONAL vs. Bristol Myers Squibb
Performance |
| Timeline |
| US BANK NATIONAL |
| Bristol Myers Squibb |
90331HPL1 and Bristol-Myers Squibb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 90331HPL1 and Bristol-Myers Squibb
The main advantage of trading using opposite 90331HPL1 and Bristol-Myers Squibb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 90331HPL1 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.The idea behind US BANK NATIONAL and Bristol Myers Squibb pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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