Correlation Between Bristol Myers and SPECTRA
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By analyzing existing cross correlation between Bristol Myers Squibb and SPECTRA ENERGY PARTNERS, you can compare the effects of market volatilities on Bristol Myers and SPECTRA 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 SPECTRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol Myers and SPECTRA.
Diversification Opportunities for Bristol Myers and SPECTRA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bristol and SPECTRA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and SPECTRA ENERGY PARTNERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRA ENERGY PARTNERS 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 SPECTRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRA ENERGY PARTNERS has no effect on the direction of Bristol Myers i.e., Bristol Myers and SPECTRA go up and down completely randomly.
Pair Corralation between Bristol Myers and SPECTRA
Assuming the 90 days horizon Bristol Myers Squibb is expected to generate 4.48 times more return on investment than SPECTRA. However, Bristol Myers is 4.48 times more volatile than SPECTRA ENERGY PARTNERS. It trades about 0.16 of its potential returns per unit of risk. SPECTRA ENERGY PARTNERS is currently generating about -0.05 per unit of risk. If you would invest 73,550 in Bristol Myers Squibb on September 24, 2024 and sell it today you would earn a total of 26,339 from holding Bristol Myers Squibb or generate 35.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Bristol Myers Squibb vs. SPECTRA ENERGY PARTNERS
Performance |
Timeline |
Bristol Myers Squibb |
SPECTRA ENERGY PARTNERS |
Bristol Myers and SPECTRA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bristol Myers and SPECTRA
The main advantage of trading using opposite Bristol Myers and SPECTRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, SPECTRA 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 SPECTRA will offset losses from the drop in SPECTRA's long position.Bristol Myers vs. Novartis AG | Bristol Myers vs. Bayer AG | Bristol Myers vs. Astellas Pharma | Bristol Myers vs. Roche Holding AG |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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