Correlation Between Bank of New York and Dana
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Dana 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 Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of New and Dana Inc, you can compare the effects of market volatilities on Bank of New York and Dana 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 Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Dana.
Diversification Opportunities for Bank of New York and Dana
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Dana is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Inc 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 Bank of New are associated (or correlated) with Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of Bank of New York i.e., Bank of New York and Dana go up and down completely randomly.
Pair Corralation between Bank of New York and Dana
Allowing for the 90-day total investment horizon Bank of New York is expected to generate 3.44 times less return on investment than Dana. But when comparing it to its historical volatility, Bank of New is 3.05 times less risky than Dana. It trades about 0.38 of its potential returns per unit of risk. Dana Inc is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 758.00 in Dana Inc on September 1, 2024 and sell it today you would earn a total of 242.00 from holding Dana Inc or generate 31.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of New vs. Dana Inc
Performance |
| Timeline |
| Bank of New York |
| Dana Inc |
Bank of New York and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Dana
The main advantage of trading using opposite Bank of New York and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Dana 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 Dana will offset losses from the drop in Dana's long position.| Bank of New York vs. Northern Trust | Bank of New York vs. Invesco Plc | Bank of New York vs. Franklin Resources | Bank of New York vs. T Rowe Price |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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