Correlation Between Bank of New York and Almacenes Xito
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Almacenes Xito 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 Almacenes Xito 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 Almacenes xito SA, you can compare the effects of market volatilities on Bank of New York and Almacenes Xito 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 Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Almacenes Xito.
Diversification Opportunities for Bank of New York and Almacenes Xito
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Almacenes is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA 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 Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of Bank of New York i.e., Bank of New York and Almacenes Xito go up and down completely randomly.
Pair Corralation between Bank of New York and Almacenes Xito
Allowing for the 90-day total investment horizon Bank of New is expected to generate 0.39 times more return on investment than Almacenes Xito. However, Bank of New is 2.58 times less risky than Almacenes Xito. It trades about 0.19 of its potential returns per unit of risk. Almacenes xito SA is currently generating about -0.1 per unit of risk. If you would invest 7,757 in Bank of New on October 22, 2024 and sell it today you would earn a total of 572.00 from holding Bank of New or generate 7.37% 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. Almacenes xito SA
Performance |
| Timeline |
| Bank of New York |
| Almacenes xito SA |
Bank of New York and Almacenes Xito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Almacenes Xito
The main advantage of trading using opposite Bank of New York and Almacenes Xito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Almacenes Xito 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 Almacenes Xito will offset losses from the drop in Almacenes Xito'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 |
| Almacenes Xito vs. Hochschild Mining PLC | Almacenes Xito vs. Rave Restaurant Group | Almacenes Xito vs. Chipotle Mexican Grill | Almacenes Xito vs. Games Workshop Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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