Correlation Between Bristol Myers and WORK Medical

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

Diversification Opportunities for Bristol Myers and WORK Medical

-0.2

Correlation Coefficient

Bristol Myers  WORK Medical

Good diversification

The 3 months correlation between Bristol and WORK is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and WORK Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WORK Medical Technology 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 WORK Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WORK Medical Technology has no effect on the direction of Bristol Myers i.e., Bristol Myers and WORK Medical go up and down completely randomly.

Pair Corralation between Bristol Myers and WORK Medical

Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the WORK Medical. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 5.53 times less risky than WORK Medical. The stock trades about -0.01 of its potential returns per unit of risk. The WORK Medical Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  360.00  in WORK Medical Technology on October 10, 2024 and sell it today you would earn a total of  22.00  from holding WORK Medical Technology or generate 6.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	18.99%
Values	Daily Returns

Bristol Myers Squibb  vs.  WORK Medical Technology

Bristol Myers Squibb

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 6 (%) 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.

WORK Medical Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WORK Medical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Bristol Myers and WORK Medical

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

The idea behind Bristol Myers Squibb and WORK Medical Technology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.