Correlation Between Bristol Myers and Oroco Resource

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

Diversification Opportunities for Bristol Myers and Oroco Resource

-0.74

Correlation Coefficient

Bristol Myers  Oroco Resource

Pay attention - limited upside

The 3 months correlation between Bristol and Oroco is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Oroco Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oroco Resource Corp 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 Oroco Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oroco Resource Corp has no effect on the direction of Bristol Myers i.e., Bristol Myers and Oroco Resource go up and down completely randomly.

Pair Corralation between Bristol Myers and Oroco Resource

Assuming the 90 days horizon Bristol Myers Squibb is expected to under-perform the Oroco Resource. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 5.3 times less risky than Oroco Resource. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Oroco Resource Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Oroco Resource Corp on October 21, 2024 and sell it today you would earn a total of  3.00  from holding Oroco Resource Corp or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.48%
Values	Daily Returns

Bristol Myers Squibb  vs.  Oroco Resource Corp

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. Even with relatively fragile primary indicators, Bristol Myers reported solid returns over the last few months and may actually be approaching a breakup point.

Oroco Resource Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oroco Resource Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Oroco Resource may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Bristol Myers and Oroco Resource

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

The idea behind Bristol Myers Squibb and Oroco Resource Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.