Correlation Between Bristol Myers and Capstone Copper

Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Capstone Copper 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 Capstone Copper 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 Capstone Copper Corp, you can compare the effects of market volatilities on Bristol Myers and Capstone Copper 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 Capstone Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Capstone Copper.

Diversification Opportunities for Bristol Myers and Capstone Copper

-0.62

Correlation Coefficient

Bristol Myers  Capstone Copper

Excellent diversification

The 3 months correlation between Bristol and Capstone is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Capstone Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Copper Corp 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 Capstone Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Copper Corp has no effect on the direction of Bristol Myers i.e., Bristol Myers and Capstone Copper go up and down completely randomly.

Pair Corralation between Bristol Myers and Capstone Copper

Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Capstone Copper. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 2.05 times less risky than Capstone Copper. The stock trades about -0.01 of its potential returns per unit of risk. The Capstone Copper Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  455.00  in Capstone Copper Corp on October 4, 2024 and sell it today you would earn a total of  161.00  from holding Capstone Copper Corp or generate 35.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bristol Myers Squibb  vs.  Capstone Copper Corp

Bristol Myers Squibb

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Bristol Myers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Capstone Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capstone Copper Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bristol Myers and Capstone Copper

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

The idea behind Bristol Myers Squibb and Capstone Copper Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.