Correlation Between Bank of America and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Bank of America and BNY Mellon 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 Bank of America and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and BNY Mellon ETF, you can compare the effects of market volatilities on Bank of America and BNY Mellon 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 Bank of America with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and BNY Mellon.
Diversification Opportunities for Bank of America and BNY Mellon
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and BNY is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and BNY Mellon ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon ETF and Bank of America 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 Bank of America are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon ETF has no effect on the direction of Bank of America i.e., Bank of America and BNY Mellon go up and down completely randomly.
Pair Corralation between Bank of America and BNY Mellon
Considering the 90-day investment horizon Bank of America is expected to generate 2.46 times more return on investment than BNY Mellon. However, Bank of America is 2.46 times more volatile than BNY Mellon ETF. It trades about 0.27 of its potential returns per unit of risk. BNY Mellon ETF is currently generating about -0.23 per unit of risk. If you would invest 4,189 in Bank of America on August 26, 2024 and sell it today you would earn a total of 511.00 from holding Bank of America or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. BNY Mellon ETF
Performance |
| Timeline |
| Bank of America |
| BNY Mellon ETF |
Bank of America and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and BNY Mellon
The main advantage of trading using opposite Bank of America and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| BNY Mellon vs. Associates First Capital | BNY Mellon vs. First Trust S Network | BNY Mellon vs. AirBoss of America |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |