Correlation Between Bristol-Myers Squibb and Burford Capital

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Can any of the company-specific risk be diversified away by investing in both Bristol-Myers Squibb and Burford Capital 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 Bristol-Myers Squibb and Burford Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristol-Myers Squibb and Burford Capital, you can compare the effects of market volatilities on Bristol-Myers Squibb and Burford Capital 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 Squibb with a short position of Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristol-Myers Squibb and Burford Capital.

Diversification Opportunities for Bristol-Myers Squibb and Burford Capital

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bristol-Myers and Burford is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bristol-Myers Squibb and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and Bristol-Myers Squibb 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 Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Bristol-Myers Squibb i.e., Bristol-Myers Squibb and Burford Capital go up and down completely randomly.

Pair Corralation between Bristol-Myers Squibb and Burford Capital

If you would invest  835.00  in Burford Capital on November 4, 2022 and sell it today you would earn a total of  53.50  from holding Burford Capital or generate 6.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Bristol-Myers Squibb  vs.  Burford Capital

 Performance (%) 
       Timeline  
Bristol-Myers Squibb 
Bristol-Myers Performance
0 of 100
Over the last 90 days Bristol-Myers Squibb has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Bristol-Myers Squibb is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the insiders.
Burford Capital 
Burford Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Burford Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Burford Capital may actually be approaching a critical reversion point that can send shares even higher in March 2023.

Burford Price Channel

Bristol-Myers Squibb and Burford Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bristol-Myers Squibb and Burford Capital

The main advantage of trading using opposite Bristol-Myers Squibb and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol-Myers Squibb position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.
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The idea behind Bristol-Myers Squibb and Burford Capital 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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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 CEO Directory module to screen CEOs from public companies around the world.

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