Correlation Between Bristol Myers and Plymouth Rock

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

Diversification Opportunities for Bristol Myers and Plymouth Rock

0.0

Correlation Coefficient

Bristol Myers  Plymouth Rock

Pay attention - limited upside

The 3 months correlation between Bristol and Plymouth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Plymouth Rock Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plymouth Rock Techno 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 Plymouth Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plymouth Rock Techno has no effect on the direction of Bristol Myers i.e., Bristol Myers and Plymouth Rock go up and down completely randomly.

Pair Corralation between Bristol Myers and Plymouth Rock

Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Plymouth Rock. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 6.72 times less risky than Plymouth Rock. The stock trades about -0.01 of its potential returns per unit of risk. The Plymouth Rock Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3.20  in Plymouth Rock Technologies on October 12, 2024 and sell it today you would earn a total of  0.80  from holding Plymouth Rock Technologies or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	25.66%
Values	Daily Returns

Bristol Myers Squibb  vs.  Plymouth Rock Technologies

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.

Plymouth Rock Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plymouth Rock Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Plymouth Rock is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bristol Myers and Plymouth Rock

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

The idea behind Bristol Myers Squibb and Plymouth Rock Technologies 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.