Correlation Between Bristol-Myers Squibb and Amtech Systems

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

Diversification Opportunities for Bristol-Myers Squibb and Amtech Systems

-0.58

Correlation Coefficient

Bristol-Myers Squibb  Amtech Systems

Excellent diversification

The 3 months correlation between Bristol-Myers and Amtech is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems and Bristol-Myers Squibb 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 Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Amtech Systems go up and down completely randomly.

Pair Corralation between Bristol-Myers Squibb and Amtech Systems

Assuming the 90 days horizon Bristol Myers Squibb is expected to under-perform the Amtech Systems. In addition to that, Bristol-Myers Squibb is 1.12 times more volatile than Amtech Systems. It trades about -0.05 of its total potential returns per unit of risk. Amtech Systems is currently generating about -0.04 per unit of volatility. If you would invest  564.00  in Amtech Systems on November 28, 2024 and sell it today you would lose (59.00) from holding Amtech Systems or give up 10.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	36.21%
Values	Daily Returns

Bristol Myers Squibb  vs.  Amtech Systems

Bristol Myers Squibb

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bristol Myers Squibb has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Amtech Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amtech Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bristol-Myers Squibb and Amtech Systems

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

The idea behind Bristol Myers Squibb and Amtech Systems 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.

Check out your portfolio center.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.