Correlation Between Intel and Bristol-Myers Squibb

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Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel 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 Intel and Bristol Myers Squibb, you can compare the effects of market volatilities on Intel 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 Intel with a short position of Bristol-Myers Squibb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Bristol-Myers Squibb.

Diversification Opportunities for Intel and Bristol-Myers Squibb

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Intel and Bristol-Myers is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intel 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 Intel 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 Intel 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 Intel i.e., Intel and Bristol-Myers Squibb go up and down completely randomly.

Pair Corralation between Intel and Bristol-Myers Squibb

If you would invest  4,440  in Intel on December 29, 2023 and sell it today you would lose (23.00) from holding Intel or give up 0.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Intel  vs.  Bristol-Myers Squibb

 Performance 
       Timeline  
Intel 

Risk-Adjusted Performance

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Over the last 90 days Intel has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
Bristol-Myers Squibb 

Risk-Adjusted Performance

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Over the last 90 days Bristol Myers Squibb has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable primary indicators, Bristol-Myers Squibb is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Intel and Bristol-Myers Squibb Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intel and Bristol-Myers Squibb

The main advantage of trading using opposite Intel and Bristol-Myers Squibb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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 Intel 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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