Correlation Between Bristol Myer and Vici Properties

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

Diversification Opportunities for Bristol Myer and Vici Properties

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Bristol and Vici Properties is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bristol Myer Squi and Vici Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vici Properties and Bristol Myer 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 Myer Squi are associated (or correlated) with Vici Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vici Properties has no effect on the direction of Bristol Myer i.e., Bristol Myer and Vici Properties go up and down completely randomly.

Pair Corralation between Bristol Myer and Vici Properties

Assuming the 90 days horizon Bristol Myer is expected to generate 1.45 times less return on investment than Vici Properties. In addition to that, Bristol Myer is 3.36 times more volatile than Vici Properties. It trades about 0.03 of its total potential returns per unit of risk. Vici Properties is currently generating about 0.13 per unit of volatility. If you would invest  3,213  in Vici Properties on August 29, 2022 and sell it today you would earn a total of  123.00  from holding Vici Properties or generate 3.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Bristol Myer Squi  vs.  Vici Properties

 Performance (%) 
       Timeline  
Bristol Myer Squi 
Bristol Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bristol Myer Squi are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Bristol Myer displayed solid returns over the last few months and may actually be approaching a breakup point.

Bristol Price Channel

Vici Properties 
Vici Properties Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Vici Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Vici Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Vici Properties Price Channel

Bristol Myer and Vici Properties Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bristol Myer and Vici Properties

The main advantage of trading using opposite Bristol Myer and Vici Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristol Myer position performs unexpectedly, Vici Properties 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 Vici Properties will offset losses from the drop in Vici Properties' long position.
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The idea behind Bristol Myer Squi and Vici Properties 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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