Correlation Between Apple and Bristol Myer

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

Diversification Opportunities for Apple and Bristol Myer

-0.9
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Apple and Bristol is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Bristol Myer Squi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristol Myer Squi and Apple 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 Apple Inc are associated (or correlated) with Bristol Myer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristol Myer Squi has no effect on the direction of Apple i.e., Apple and Bristol Myer go up and down completely randomly.

Pair Corralation between Apple and Bristol Myer

Given the investment horizon of 90 days Apple Inc is expected to under-perform the Bristol Myer. In addition to that, Apple is 1.04 times more volatile than Bristol Myer Squi. It trades about -0.09 of its total potential returns per unit of risk. Bristol Myer Squi is currently generating about 0.12 per unit of volatility. If you would invest  110,053  in Bristol Myer Squi on June 29, 2022 and sell it today you would earn a total of  8,947  from holding Bristol Myer Squi or generate 8.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy97.62%
ValuesDaily Returns

Apple Inc  vs.  Bristol Myer Squi

 Performance (%) 
       Timeline  
Apple Inc 
Apple Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Apple Price Channel

Bristol Myer Squi 
Bristol Performance
0 of 100
Over the last 90 days Bristol Myer Squi has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm insiders.

Bristol Price Channel

Apple and Bristol Myer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Apple and Bristol Myer

The main advantage of trading using opposite Apple and Bristol Myer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Bristol Myer 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 Myer will offset losses from the drop in Bristol Myer's long position.
Apple vs. Kibush Capital Corp
The idea behind Apple Inc and Bristol Myer Squi 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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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