Correlation Between Protective Life and Bristol-Myers Squibb
Can any of the company-specific risk be diversified away by investing in both Protective Life 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 Protective Life 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 Protective Life Dynamic and Bristol Myers Squibb, you can compare the effects of market volatilities on Protective Life 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 Protective Life with a short position of Bristol-Myers Squibb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Protective Life and Bristol-Myers Squibb.
Diversification Opportunities for Protective Life and Bristol-Myers Squibb
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Protective and Bristol-Myers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Protective Life Dynamic 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 Protective Life 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 Protective Life Dynamic 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 Protective Life i.e., Protective Life and Bristol-Myers Squibb go up and down completely randomly.
Pair Corralation between Protective Life and Bristol-Myers Squibb
If you would invest (100.00) in Bristol Myers Squibb on January 18, 2024 and sell it today you would earn a total of 100.00 from holding Bristol Myers Squibb or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Protective Life Dynamic vs. Bristol Myers Squibb
Performance |
Timeline |
Protective Life Dynamic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bristol Myers Squibb |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Protective Life and Bristol-Myers Squibb Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Protective Life and Bristol-Myers Squibb
The main advantage of trading using opposite Protective Life and Bristol-Myers Squibb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Protective Life 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.Protective Life vs. Western Asset High | Protective Life vs. Siit High Yield | Protective Life vs. Ab High Income | Protective Life vs. Intal High Relative |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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