Correlation Between IQ MacKay and Bristol Myers
Can any of the company-specific risk be diversified away by investing in both IQ MacKay 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 IQ MacKay and Bristol Myers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ MacKay Municipal and Bristol Myers Squibb, you can compare the effects of market volatilities on IQ MacKay 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 IQ MacKay with a short position of Bristol Myers. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ MacKay and Bristol Myers.
Diversification Opportunities for IQ MacKay and Bristol Myers
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MMIT and Bristol is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding IQ MacKay Municipal 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 IQ MacKay 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 IQ MacKay Municipal 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 IQ MacKay i.e., IQ MacKay and Bristol Myers go up and down completely randomly.
Pair Corralation between IQ MacKay and Bristol Myers
Given the investment horizon of 90 days IQ MacKay is expected to generate 2.39 times less return on investment than Bristol Myers. But when comparing it to its historical volatility, IQ MacKay Municipal is 11.03 times less risky than Bristol Myers. It trades about 0.43 of its potential returns per unit of risk. Bristol Myers Squibb is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,972 in Bristol Myers Squibb on June 30, 2024 and sell it today you would earn a total of 119.00 from holding Bristol Myers Squibb or generate 2.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
IQ MacKay Municipal vs. Bristol Myers Squibb
Performance |
Timeline |
IQ MacKay Municipal |
Bristol Myers Squibb |
IQ MacKay and Bristol Myers Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IQ MacKay and Bristol Myers
The main advantage of trading using opposite IQ MacKay and Bristol Myers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ MacKay 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.IQ MacKay vs. IQ MacKay Municipal | IQ MacKay vs. Franklin Liberty Federal | IQ MacKay vs. Franklin Liberty Intermediate |
Bristol Myers vs. PetIQ Inc | Bristol Myers vs. Emergent Biosolutions | Bristol Myers vs. Neurocrine Biosciences | Bristol Myers vs. Haleon plc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |