Correlation Between Bristol Myers and Phreesia

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

Diversification Opportunities for Bristol Myers and Phreesia

-0.29

Correlation Coefficient

Bristol Myers  Phreesia

Very good diversification

The 3 months correlation between Bristol and Phreesia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Phreesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phreesia 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 Phreesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phreesia has no effect on the direction of Bristol Myers i.e., Bristol Myers and Phreesia go up and down completely randomly.

Pair Corralation between Bristol Myers and Phreesia

Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.49 times more return on investment than Phreesia. However, Bristol Myers Squibb is 2.03 times less risky than Phreesia. It trades about 0.07 of its potential returns per unit of risk. Phreesia is currently generating about 0.02 per unit of risk. If you would invest  5,545  in Bristol Myers Squibb on December 29, 2024 and sell it today you would earn a total of  345.00  from holding Bristol Myers Squibb or generate 6.22% return on investment over 90 days.

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

Bristol Myers Squibb  vs.  Phreesia

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 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 April 2025.

Phreesia

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Phreesia are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical indicators, Phreesia is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Bristol Myers and Phreesia

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

The idea behind Bristol Myers Squibb and Phreesia 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.