Correlation Between Trustcash Holdings and Bristol-Myers Squibb

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

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

Diversification Opportunities for Trustcash Holdings and Bristol-Myers Squibb

-0.81

Correlation Coefficient

Trustcash Holdings  Bristol-Myers Squibb

Pay attention - limited upside

The 3 months correlation between Trustcash and Bristol-Myers is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Trustcash Holdings 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 Trustcash Holdings 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 Trustcash Holdings are associated (or correlated) with Bristol-Myers Squibb. 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 Trustcash Holdings i.e., Trustcash Holdings and Bristol-Myers Squibb go up and down completely randomly.

Pair Corralation between Trustcash Holdings and Bristol-Myers Squibb

Given the investment horizon of 90 days Trustcash Holdings is expected to under-perform the Bristol-Myers Squibb. In addition to that, Trustcash Holdings is 3.66 times more volatile than Bristol Myers Squibb. It trades about -0.13 of its total potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.12 per unit of volatility. If you would invest  80,055  in Bristol Myers Squibb on September 2, 2024 and sell it today you would earn a total of  20,500  from holding Bristol Myers Squibb or generate 25.61% return on investment over 90 days.

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

Trustcash Holdings  vs.  Bristol Myers Squibb

Trustcash Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trustcash Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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.

Pair Trading with Trustcash Holdings and Bristol-Myers Squibb

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

The idea behind Trustcash Holdings 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 Stocks Directory module to find actively traded stocks across global markets.