Correlation Between Bristol-Myers Squibb and Regen BioPharma

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

Diversification Opportunities for Bristol-Myers Squibb and Regen BioPharma

-0.33

Correlation Coefficient

Bristol-Myers Squibb  Regen BioPharma

Very good diversification

The 3 months correlation between Bristol-Myers and Regen is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Regen BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regen BioPharma 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 Regen BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regen BioPharma has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Regen BioPharma go up and down completely randomly.

Pair Corralation between Bristol-Myers Squibb and Regen BioPharma

Assuming the 90 days horizon Bristol-Myers Squibb is expected to generate 14.42 times less return on investment than Regen BioPharma. But when comparing it to its historical volatility, Bristol Myers Squibb is 13.76 times less risky than Regen BioPharma. It trades about 0.12 of its potential returns per unit of risk. Regen BioPharma is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Regen BioPharma on September 3, 2024 and sell it today you would lose (9.96) from holding Regen BioPharma or give up 55.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Bristol Myers Squibb  vs.  Regen BioPharma

Bristol Myers Squibb

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile primary indicators, Bristol-Myers Squibb reported solid returns over the last few months and may actually be approaching a breakup point.

Regen BioPharma

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regen BioPharma are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Regen BioPharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristol-Myers Squibb and Regen BioPharma

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

The idea behind Bristol Myers Squibb and Regen BioPharma 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.