Correlation Between Bristol-Myers Squibb and Sanofi
Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Sanofi 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 Squibb and Sanofi 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 Sanofi, you can compare the effects of market volatilities on Bristol-Myers Squibb and Sanofi 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 Squibb with a short position of Sanofi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Sanofi.
Diversification Opportunities for Bristol-Myers Squibb and Sanofi
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bristol-Myers and Sanofi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Sanofi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanofi and Bristol-Myers Squibb 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 Sanofi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanofi has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Sanofi go up and down completely randomly.
Pair Corralation between Bristol-Myers Squibb and Sanofi
If you would invest (100.00) in Bristol Myers Squibb on January 17, 2024 and sell it today you would earn a total of 100.00 from holding Bristol Myers Squibb 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 |
Bristol Myers Squibb vs. Sanofi
Performance |
| Timeline |
| Bristol Myers Squibb |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sanofi |
Bristol-Myers Squibb and Sanofi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristol-Myers Squibb and Sanofi
The main advantage of trading using opposite Bristol-Myers Squibb and Sanofi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Sanofi 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 Sanofi will offset losses from the drop in Sanofi's long position.| Bristol-Myers Squibb vs. Novartis AG | Bristol-Myers Squibb vs. Bayer Aktiengesellschaft | Bristol-Myers Squibb vs. Astellas Pharma | Bristol-Myers Squibb vs. Roche Holding AG |
| Sanofi vs. Sanofi ADR | Sanofi vs. Roche Holding Ltd | Sanofi vs. AstraZeneca PLC ADR | Sanofi vs. Bristol Myers Squibb |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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