Correlation Between Bayview Acquisition and Bny Mellon

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

Diversification Opportunities for Bayview Acquisition and Bny Mellon

-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Bayview and Bny is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bayview Acquisition Corp and Bny Mellon Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Intermediate and Bayview Acquisition 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 Bayview Acquisition Corp 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 Intermediate has no effect on the direction of Bayview Acquisition i.e., Bayview Acquisition and Bny Mellon go up and down completely randomly.

Pair Corralation between Bayview Acquisition and Bny Mellon

Assuming the 90 days horizon Bayview Acquisition Corp is expected to generate 2.92 times more return on investment than Bny Mellon. However, Bayview Acquisition is 2.92 times more volatile than Bny Mellon Intermediate. It trades about 0.17 of its potential returns per unit of risk. Bny Mellon Intermediate is currently generating about -0.09 per unit of risk. If you would invest  1,043  in Bayview Acquisition Corp on September 12, 2024 and sell it today you would earn a total of  67.00  from holding Bayview Acquisition Corp or generate 6.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bayview Acquisition Corp  vs.  Bny Mellon Intermediate

 Performance 
       Timeline  
Bayview Acquisition Corp 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bayview Acquisition Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Bayview Acquisition may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Bny Mellon Intermediate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bny Mellon Intermediate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Bny Mellon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bayview Acquisition and Bny Mellon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bayview Acquisition and Bny Mellon

The main advantage of trading using opposite Bayview Acquisition and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayview Acquisition 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.
The idea behind Bayview Acquisition Corp and Bny Mellon Intermediate 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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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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