Correlation Between Bristol Myers and Diego Pellicer

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

Diversification Opportunities for Bristol Myers and Diego Pellicer

-0.62

Correlation Coefficient

Bristol Myers  Diego Pellicer

Excellent diversification

The 3 months correlation between Bristol and Diego is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Diego Pellicer Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diego Pellicer Worldwide 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 Diego Pellicer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diego Pellicer Worldwide has no effect on the direction of Bristol Myers i.e., Bristol Myers and Diego Pellicer go up and down completely randomly.

Pair Corralation between Bristol Myers and Diego Pellicer

Assuming the 90 days horizon Bristol Myers is expected to generate 1752.37 times less return on investment than Diego Pellicer. But when comparing it to its historical volatility, Bristol Myers Squibb is 42.41 times less risky than Diego Pellicer. It trades about 0.0 of its potential returns per unit of risk. Diego Pellicer Worldwide is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.40  in Diego Pellicer Worldwide on September 24, 2024 and sell it today you would lose (0.39) from holding Diego Pellicer Worldwide or give up 97.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	47.89%
Values	Daily Returns

Bristol Myers Squibb  vs.  Diego Pellicer Worldwide

Bristol Myers Squibb

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile primary indicators, Bristol Myers reported solid returns over the last few months and may actually be approaching a breakup point.

Diego Pellicer Worldwide

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Diego Pellicer Worldwide are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Diego Pellicer showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristol Myers and Diego Pellicer

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

The idea behind Bristol Myers Squibb and Diego Pellicer Worldwide 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.