Correlation Between Bristol Myers and Central Proteina
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Central Proteina 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 Central Proteina 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 Central Proteina Prima, you can compare the effects of market volatilities on Bristol Myers and Central Proteina 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 Central Proteina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Central Proteina.
Diversification Opportunities for Bristol Myers and Central Proteina
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bristol and Central is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Central Proteina Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Proteina Prima 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 Central Proteina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Proteina Prima has no effect on the direction of Bristol Myers i.e., Bristol Myers and Central Proteina go up and down completely randomly.
Pair Corralation between Bristol Myers and Central Proteina
Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Central Proteina. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 2.59 times less risky than Central Proteina. The stock trades about -0.07 of its potential returns per unit of risk. The Central Proteina Prima is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Central Proteina Prima on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Central Proteina Prima or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Central Proteina Prima
Performance |
| Timeline |
| Bristol Myers Squibb |
| Central Proteina Prima |
Bristol Myers and Central Proteina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Central Proteina
The main advantage of trading using opposite Bristol Myers and Central Proteina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Central Proteina 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 Central Proteina will offset losses from the drop in Central Proteina's long position.| Bristol Myers vs. AbbVie Inc | Bristol Myers vs. Merck Company | Bristol Myers vs. Gilead Sciences | Bristol Myers vs. Johnson Johnson |
| Central Proteina vs. Bakrie Brothers Tbk | Central Proteina vs. Bakrieland Development Tbk | Central Proteina vs. Darma Henwa Tbk | Central Proteina vs. Bakrie Sumatera Plantations |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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