Correlation Between Allergan Plc and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both Allergan Plc and Bristol Myers 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 Allergan Plc and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allergan Plc and Bristol Myers Squibb, you can compare the effects of market volatilities on Allergan Plc and Bristol Myers 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 Allergan Plc with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allergan Plc and Bristol Myers.
Diversification Opportunities for Allergan Plc and Bristol Myers
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allergan and Bristol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Allergan Plc and Bristol Myers Squibb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristol Myers Squibb and Allergan Plc 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 Allergan Plc are associated (or correlated) with Bristol Myers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristol Myers Squibb has no effect on the direction of Allergan Plc i.e., Allergan Plc and Bristol Myers go up and down completely randomly.
Pair Corralation between Allergan Plc and Bristol Myers
If you would invest (100.00) in Allergan Plc on January 21, 2024 and sell it today you would earn a total of 100.00 from holding Allergan Plc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Allergan Plc vs. Bristol Myers Squibb
Performance |
| Timeline |
| Allergan Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bristol Myers Squibb |
Allergan Plc and Bristol Myers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allergan Plc and Bristol Myers
The main advantage of trading using opposite Allergan Plc and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allergan Plc position performs unexpectedly, Bristol Myers 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 Bristol Myers will offset losses from the drop in Bristol Myers' long position.| Allergan Plc vs. Getty Realty | Allergan Plc vs. Sea | Allergan Plc vs. Grow Solutions Holdings | Allergan Plc vs. Paysafe |
| Bristol Myers vs. Alkermes Plc | Bristol Myers vs. Ironwood Pharmaceuticals | Bristol Myers vs. Deciphera Pharmaceuticals LLC | Bristol Myers vs. Eagle Pharmaceuticals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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