Correlation Between Bristol Myers and COSCO SHIPPING

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

Diversification Opportunities for Bristol Myers and COSCO SHIPPING

-0.38

Correlation Coefficient

Bristol Myers  COSCO SHIPPING

Very good diversification

The 3 months correlation between Bristol and COSCO is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and COSCO SHIPPING Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Devel 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Devel has no effect on the direction of Bristol Myers i.e., Bristol Myers and COSCO SHIPPING go up and down completely randomly.

Pair Corralation between Bristol Myers and COSCO SHIPPING

Assuming the 90 days horizon Bristol Myers is expected to generate 5.3 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Bristol Myers Squibb is 1.24 times less risky than COSCO SHIPPING. It trades about 0.03 of its potential returns per unit of risk. COSCO SHIPPING Development is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  11.00  in COSCO SHIPPING Development on May 2, 2025 and sell it today you would earn a total of  4.00  from holding COSCO SHIPPING Development or generate 36.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	49.21%
Values	Daily Returns

Bristol Myers Squibb  vs.  COSCO SHIPPING Development

Bristol Myers Squibb

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating primary indicators, Bristol Myers reported solid returns over the last few months and may actually be approaching a breakup point.

COSCO SHIPPING Devel

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in COSCO SHIPPING Development are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, COSCO SHIPPING reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristol Myers and COSCO SHIPPING

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

The idea behind Bristol Myers Squibb and COSCO SHIPPING Development 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .