Correlation Between Bristol Myers and Cingulate Warrants

Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Cingulate Warrants 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 Bristol Myers and Cingulate Warrants into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bristol Myers Squibb and Cingulate Warrants, you can compare the effects of market volatilities on Bristol Myers and Cingulate Warrants 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 Bristol Myers with a short position of Cingulate Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Cingulate Warrants.

Diversification Opportunities for Bristol Myers and Cingulate Warrants

-0.31

Correlation Coefficient

Bristol Myers  Cingulate Warrants

Very good diversification

The 3 months correlation between Bristol and Cingulate is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Cingulate Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cingulate Warrants and Bristol Myers 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 Bristol Myers Squibb are associated (or correlated) with Cingulate Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cingulate Warrants has no effect on the direction of Bristol Myers i.e., Bristol Myers and Cingulate Warrants go up and down completely randomly.

Pair Corralation between Bristol Myers and Cingulate Warrants

Considering the 90-day investment horizon Bristol Myers is expected to generate 12.0 times less return on investment than Cingulate Warrants. But when comparing it to its historical volatility, Bristol Myers Squibb is 12.0 times less risky than Cingulate Warrants. It trades about 0.09 of its potential returns per unit of risk. Cingulate Warrants is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5.13  in Cingulate Warrants on December 29, 2024 and sell it today you would earn a total of  0.08  from holding Cingulate Warrants or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Bristol Myers Squibb  vs.  Cingulate Warrants

Bristol Myers Squibb

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Bristol Myers may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cingulate Warrants

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cingulate Warrants are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Cingulate Warrants showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristol Myers and Cingulate Warrants

The main advantage of trading using opposite Bristol Myers and Cingulate Warrants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Cingulate Warrants 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 Cingulate Warrants will offset losses from the drop in Cingulate Warrants' long position.

The idea behind Bristol Myers Squibb and Cingulate Warrants 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.