Correlation Between Bristol Myers and DoorDash,

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

Diversification Opportunities for Bristol Myers and DoorDash,

0.89

Correlation Coefficient

Bristol Myers  DoorDash,

Very poor diversification

The 3 months correlation between Bristol and DoorDash, is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and DoorDash, Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoorDash, Class A 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 DoorDash,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoorDash, Class A has no effect on the direction of Bristol Myers i.e., Bristol Myers and DoorDash, go up and down completely randomly.

Pair Corralation between Bristol Myers and DoorDash,

Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.6 times more return on investment than DoorDash,. However, Bristol Myers Squibb is 1.67 times less risky than DoorDash,. It trades about 0.02 of its potential returns per unit of risk. DoorDash, Class A is currently generating about -0.07 per unit of risk. If you would invest  5,567  in Bristol Myers Squibb on October 13, 2024 and sell it today you would earn a total of  16.00  from holding Bristol Myers Squibb or generate 0.29% return on investment over 90 days.

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

Bristol Myers Squibb  vs.  DoorDash, Class A

Bristol Myers Squibb

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 5 (%) 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 February 2025.

DoorDash, Class A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DoorDash, Class A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, DoorDash, demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristol Myers and DoorDash,

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

The idea behind Bristol Myers Squibb and DoorDash, Class A 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.