Correlation Between Bristol-Myers Squibb and MicroStrategy Incorporated

Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and MicroStrategy Incorporated 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 MicroStrategy Incorporated 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 MicroStrategy Incorporated 1000, you can compare the effects of market volatilities on Bristol-Myers Squibb and MicroStrategy Incorporated 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 MicroStrategy Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and MicroStrategy Incorporated.

Diversification Opportunities for Bristol-Myers Squibb and MicroStrategy Incorporated

-0.32

Correlation Coefficient

Bristol-Myers Squibb  MicroStrategy Incorporated

Very good diversification

The 3 months correlation between Bristol-Myers and MicroStrategy is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and MicroStrategy Incorporated 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroStrategy Incorporated 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 MicroStrategy Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroStrategy Incorporated has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and MicroStrategy Incorporated go up and down completely randomly.

Pair Corralation between Bristol-Myers Squibb and MicroStrategy Incorporated

Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 1.09 times more return on investment than MicroStrategy Incorporated. However, Bristol-Myers Squibb is 1.09 times more volatile than MicroStrategy Incorporated 1000. It trades about 0.08 of its potential returns per unit of risk. MicroStrategy Incorporated 1000 is currently generating about 0.01 per unit of risk. If you would invest  81,000  in Bristol Myers Squibb on September 16, 2025 and sell it today you would earn a total of  7,111  from holding Bristol Myers Squibb or generate 8.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bristol Myers Squibb  vs.  MicroStrategy Incorporated 100

Bristol Myers Squibb

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile primary indicators, Bristol-Myers Squibb may actually be approaching a critical reversion point that can send shares even higher in January 2026.

MicroStrategy Incorporated

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MicroStrategy Incorporated 1000 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MicroStrategy Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bristol-Myers Squibb and MicroStrategy Incorporated

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

The idea behind Bristol Myers Squibb and MicroStrategy Incorporated 1000 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.