Correlation Between Sanofi ADR and Bristol Myers

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

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

Diversification Opportunities for Sanofi ADR and Bristol Myers

0.0

Correlation Coefficient

Sanofi ADR  Bristol Myers

Pay attention - limited upside

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

Pair Corralation between Sanofi ADR and Bristol Myers

If you would invest  4,796  in Sanofi ADR on February 3, 2024 and sell it today you would earn a total of  150.00  from holding Sanofi ADR or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sanofi ADR  vs.  Bristol Myers Squibb

Sanofi ADR

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sanofi ADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sanofi ADR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bristol Myers Squibb

Risk-Adjusted Performance

0 of 100

Very Weak

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 is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sanofi ADR and Bristol Myers

The main advantage of trading using opposite Sanofi ADR and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi ADR 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 Sanofi ADR 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 Global Correlations module to find global opportunities by holding instruments from different markets.