Correlation Between Bank of New York and Gores Holdings
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Gores Holdings 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 Gores Holdings 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 Gores Holdings IX, you can compare the effects of market volatilities on Bank of New York and Gores Holdings 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 Gores Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Gores Holdings.
Diversification Opportunities for Bank of New York and Gores Holdings
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Gores is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Gores Holdings IX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gores Holdings IX 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 Gores Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gores Holdings IX has no effect on the direction of Bank of New York i.e., Bank of New York and Gores Holdings go up and down completely randomly.
Pair Corralation between Bank of New York and Gores Holdings
Allowing for the 90-day total investment horizon Bank of New is expected to generate 2.02 times more return on investment than Gores Holdings. However, Bank of New York is 2.02 times more volatile than Gores Holdings IX. It trades about 0.28 of its potential returns per unit of risk. Gores Holdings IX is currently generating about -0.21 per unit of risk. If you would invest 7,656 in Bank of New on August 30, 2024 and sell it today you would earn a total of 518.00 from holding Bank of New or generate 6.77% 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. Gores Holdings IX
Performance |
| Timeline |
| Bank of New York |
| Gores Holdings IX |
Bank of New York and Gores Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Gores Holdings
The main advantage of trading using opposite Bank of New York and Gores Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Gores Holdings 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 Gores Holdings will offset losses from the drop in Gores Holdings' 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 |
| Gores Holdings vs. Patria Latin American | Gores Holdings vs. ABIVAX Socit Anonyme | Gores Holdings vs. Pinnacle Sherman Multi Strategy | Gores Holdings vs. Morningstar Unconstrained Allocation |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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