Correlation Between Bank of New York and Brompton Lifeco
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Brompton Lifeco 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 New York and Brompton Lifeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Banc Corp and Brompton Lifeco Split, you can compare the effects of market volatilities on Bank of New York and Brompton Lifeco 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 New York with a short position of Brompton Lifeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Brompton Lifeco.
Diversification Opportunities for Bank of New York and Brompton Lifeco
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Brompton is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Banc Corp and Brompton Lifeco Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Lifeco Split and Bank of New York 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 Canadian Banc Corp are associated (or correlated) with Brompton Lifeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Lifeco Split has no effect on the direction of Bank of New York i.e., Bank of New York and Brompton Lifeco go up and down completely randomly.
Pair Corralation between Bank of New York and Brompton Lifeco
Assuming the 90 days horizon Bank of New York is expected to generate 5.8 times less return on investment than Brompton Lifeco. But when comparing it to its historical volatility, Canadian Banc Corp is 2.15 times less risky than Brompton Lifeco. It trades about 0.04 of its potential returns per unit of risk. Brompton Lifeco Split is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Brompton Lifeco Split on August 27, 2024 and sell it today you would earn a total of 692.00 from holding Brompton Lifeco Split or generate 209.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Banc Corp vs. Brompton Lifeco Split
Performance |
| Timeline |
| Canadian Banc Corp |
| Brompton Lifeco Split |
Bank of New York and Brompton Lifeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Brompton Lifeco
The main advantage of trading using opposite Bank of New York and Brompton Lifeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Brompton Lifeco 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 Brompton Lifeco will offset losses from the drop in Brompton Lifeco's long position.| Bank of New York vs. Financial 15 Split | Bank of New York vs. Life Banc Split | Bank of New York vs. Global Dividend Growth | Bank of New York vs. Brompton Split Banc |
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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 the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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