Correlation Between Clearwater Paper and Bristol-Myers Squibb

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Clearwater Paper and Bristol-Myers Squibb 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 Clearwater Paper and Bristol-Myers Squibb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearwater Paper and Bristol-Myers Squibb, you can compare the effects of market volatilities on Clearwater Paper and Bristol-Myers Squibb 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 Clearwater Paper with a short position of Bristol-Myers Squibb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Paper and Bristol-Myers Squibb.

Diversification Opportunities for Clearwater Paper and Bristol-Myers Squibb

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Clearwater and Bristol-Myers is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Paper 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 Clearwater Paper 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 Clearwater Paper are associated (or correlated) with Bristol-Myers Squibb. 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 Clearwater Paper i.e., Clearwater Paper and Bristol-Myers Squibb go up and down completely randomly.

Pair Corralation between Clearwater Paper and Bristol-Myers Squibb

Considering the 90-day investment horizon Clearwater Paper is expected to under-perform the Bristol-Myers Squibb. But the stock apears to be less risky and, when comparing its historical volatility, Clearwater Paper is 1.6 times less risky than Bristol-Myers Squibb. The stock trades about -0.01 of its potential returns per unit of risk. The Bristol-Myers Squibb is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  120,200  in Bristol-Myers Squibb on September 5, 2022 and sell it today you would earn a total of  8,500  from holding Bristol-Myers Squibb or generate 7.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

Clearwater Paper  vs.  Bristol-Myers Squibb

 Performance (%) 
       Timeline  
Clearwater Paper 
Clearwater Performance
0 of 100
Over the last 90 days Clearwater Paper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Clearwater Paper is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Clearwater Price Channel

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

Bristol-Myers Price Channel

Clearwater Paper and Bristol-Myers Squibb Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clearwater Paper and Bristol-Myers Squibb

The main advantage of trading using opposite Clearwater Paper and Bristol-Myers Squibb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Paper position performs unexpectedly, Bristol-Myers Squibb 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 Squibb will offset losses from the drop in Bristol-Myers Squibb's long position.
Clearwater Paper vs. Acadian Timber Corp
Clearwater Paper vs. Conifex Timber
The idea behind Clearwater Paper 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.
Bristol-Myers Squibb vs. Argo Group US
Bristol-Myers Squibb vs. Brighthouse Financial
Bristol-Myers Squibb vs. Conifer Holdings
Bristol-Myers Squibb vs. Navient SR
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 Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go
Bond Directory
Find actively traded corporate debentures issued by US companies
Go