Correlation Between KEYCORP and Bristol Myers
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By analyzing existing cross correlation between KEYCORP MTN and Bristol Myers Squibb, you can compare the effects of market volatilities on KEYCORP 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 KEYCORP with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEYCORP and Bristol Myers.
Diversification Opportunities for KEYCORP and Bristol Myers
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between KEYCORP and Bristol is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding KEYCORP MTN 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 KEYCORP 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 KEYCORP MTN 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 KEYCORP i.e., KEYCORP and Bristol Myers go up and down completely randomly.
Pair Corralation between KEYCORP and Bristol Myers
Assuming the 90 days trading horizon KEYCORP MTN is expected to under-perform the Bristol Myers. In addition to that, KEYCORP is 1.11 times more volatile than Bristol Myers Squibb. It trades about -0.08 of its total potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.11 per unit of volatility. If you would invest 5,038 in Bristol Myers Squibb on September 24, 2024 and sell it today you would earn a total of 695.00 from holding Bristol Myers Squibb or generate 13.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
KEYCORP MTN vs. Bristol Myers Squibb
Performance |
Timeline |
KEYCORP MTN |
Bristol Myers Squibb |
KEYCORP and Bristol Myers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KEYCORP and Bristol Myers
The main advantage of trading using opposite KEYCORP and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEYCORP 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 KEYCORP MTN 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.Bristol Myers vs. Oric Pharmaceuticals | Bristol Myers vs. Lyra Therapeutics | Bristol Myers vs. Inhibrx | Bristol Myers vs. ESSA Pharma |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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