Correlation Between Bristol Myers and Quantum Si

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

Diversification Opportunities for Bristol Myers and Quantum Si

-0.55

Correlation Coefficient

Bristol Myers  Quantum Si

Excellent diversification

The 3 months correlation between Bristol and Quantum is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myers Squibb and Quantum Si incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantum Si incorporated and Bristol Myers 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 Quantum Si. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantum Si incorporated has no effect on the direction of Bristol Myers i.e., Bristol Myers and Quantum Si go up and down completely randomly.

Pair Corralation between Bristol Myers and Quantum Si

Considering the 90-day investment horizon Bristol Myers Squibb is expected to under-perform the Quantum Si. But the stock apears to be less risky and, when comparing its historical volatility, Bristol Myers Squibb is 34.02 times less risky than Quantum Si. The stock trades about -0.02 of its potential returns per unit of risk. The Quantum Si incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Quantum Si incorporated on July 3, 2024 and sell it today you would lose (41.34) from holding Quantum Si incorporated or give up 82.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.32%
Values	Daily Returns

Bristol Myers Squibb  vs.  Quantum Si incorporated

Bristol Myers Squibb

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myers Squibb are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Bristol Myers showed solid returns over the last few months and may actually be approaching a breakup point.

Quantum Si incorporated

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Si incorporated are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Quantum Si showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristol Myers and Quantum Si

The main advantage of trading using opposite Bristol Myers and Quantum Si positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myers position performs unexpectedly, Quantum Si 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 Quantum Si will offset losses from the drop in Quantum Si's long position.

The idea behind Bristol Myers Squibb and Quantum Si incorporated 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.