Correlation Between Inland Real and Bristol Myers

Can any of the company-specific risk be diversified away by investing in both Inland Real and Bristol Myers 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 Inland Real and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inland Real Estateome and Bristol Myers Squibb, you can compare the effects of market volatilities on Inland Real and Bristol Myers 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 Inland Real with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inland Real and Bristol Myers.

Diversification Opportunities for Inland Real and Bristol Myers

0.6

Correlation Coefficient

Inland Real  Bristol Myers

Poor diversification

The 3 months correlation between Inland and Bristol is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Inland Real Estateome and Bristol Myers Squibb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristol Myers Squibb and Inland Real 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 Inland Real Estateome are associated (or correlated) with Bristol Myers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristol Myers Squibb has no effect on the direction of Inland Real i.e., Inland Real and Bristol Myers go up and down completely randomly.

Pair Corralation between Inland Real and Bristol Myers

If you would invest  1,100  in Inland Real Estateome on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Inland Real Estateome or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Inland Real Estateome  vs.  Bristol Myers Squibb

Inland Real Estateome

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inland Real Estateome are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Inland Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bristol Myers Squibb

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile primary indicators, Bristol Myers reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inland Real and Bristol Myers

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

The idea behind Inland Real Estateome and Bristol Myers Squibb 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.