Correlation Between Bank of New York and Focus Financial
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Focus Financial 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 Focus Financial 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 Focus Financial Partners, you can compare the effects of market volatilities on Bank of New York and Focus Financial 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 Focus Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Focus Financial.
Diversification Opportunities for Bank of New York and Focus Financial
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Focus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Focus Financial Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Financial Partners 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 Focus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Financial Partners has no effect on the direction of Bank of New York i.e., Bank of New York and Focus Financial go up and down completely randomly.
Pair Corralation between Bank of New York and Focus Financial
If you would invest 7,651 in Bank of New on August 27, 2024 and sell it today you would earn a total of 363.00 from holding Bank of New or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Bank of New vs. Focus Financial Partners
Performance |
| Timeline |
| Bank of New York |
| Focus Financial Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of New York and Focus Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Focus Financial
The main advantage of trading using opposite Bank of New York and Focus Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Focus Financial 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 Focus Financial will offset losses from the drop in Focus Financial'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 |
| Focus Financial vs. Federated Premier Municipal | Focus Financial vs. Blackrock Muniyield | Focus Financial vs. Diamond Hill Investment | Focus Financial vs. NXG NextGen Infrastructure |
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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