Correlation Between Bristol Myers and Electronics Fund
Can any of the company-specific risk be diversified away by investing in both Bristol Myers and Electronics Fund 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 Electronics Fund 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 Electronics Fund Class, you can compare the effects of market volatilities on Bristol Myers and Electronics Fund 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 Electronics Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and Electronics Fund.
Diversification Opportunities for Bristol Myers and Electronics Fund
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bristol and Electronics is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Electronics Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronics Fund Class 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 Electronics Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronics Fund Class has no effect on the direction of Bristol Myers i.e., Bristol Myers and Electronics Fund go up and down completely randomly.
Pair Corralation between Bristol Myers and Electronics Fund
Considering the 90-day investment horizon Bristol Myers Squibb is expected to generate 0.65 times more return on investment than Electronics Fund. However, Bristol Myers Squibb is 1.53 times less risky than Electronics Fund. It trades about -0.23 of its potential returns per unit of risk. Electronics Fund Class is currently generating about -0.16 per unit of risk. If you would invest 5,195 in Bristol Myers Squibb on January 26, 2024 and sell it today you would lose (309.00) from holding Bristol Myers Squibb or give up 5.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristol Myers Squibb vs. Electronics Fund Class
Performance |
| Timeline |
| Bristol Myers Squibb |
| Electronics Fund Class |
Bristol Myers and Electronics Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol Myers and Electronics Fund
The main advantage of trading using opposite Bristol Myers and Electronics Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Electronics Fund 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 Electronics Fund will offset losses from the drop in Electronics Fund's long position.| Bristol Myers vs. Aurora Cannabis | Bristol Myers vs. Shuttle Pharmaceuticals | Bristol Myers vs. Lifecore Biomedical | Bristol Myers vs. Lucy Scientific Discovery |
| Electronics Fund vs. Mid Cap 15x Strategy | Electronics Fund vs. Columbia Small Cap | Electronics Fund vs. Valic Company I | Electronics Fund vs. Amg River Road |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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