Correlation Between Bristol Myers and Grindr Warrant

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

Diversification Opportunities for Bristol Myers and Grindr Warrant

0.83

Correlation Coefficient

Bristol Myers  Grindr Warrant

Very poor diversification

The 3 months correlation between Bristol and Grindr is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Grindr Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grindr Warrant 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 Grindr Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grindr Warrant has no effect on the direction of Bristol Myers i.e., Bristol Myers and Grindr Warrant go up and down completely randomly.

Pair Corralation between Bristol Myers and Grindr Warrant

Assuming the 90 days horizon Bristol Myers is expected to generate 2.71 times less return on investment than Grindr Warrant. But when comparing it to its historical volatility, Bristol Myers Squibb is 1.63 times less risky than Grindr Warrant. It trades about 0.13 of its potential returns per unit of risk. Grindr Warrant is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  319.00  in Grindr Warrant on September 18, 2024 and sell it today you would earn a total of  274.00  from holding Grindr Warrant or generate 85.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.77%
Values	Daily Returns

Bristol Myers Squibb  vs.  Grindr Warrant

Bristol Myers Squibb

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 10 (%) 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.

Grindr Warrant

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grindr Warrant are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Grindr Warrant unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristol Myers and Grindr Warrant

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

The idea behind Bristol Myers Squibb and Grindr Warrant 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.