Correlation Between Bank of New York and Guild Holdings
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Guild 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 Guild 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 Guild Holdings Co, you can compare the effects of market volatilities on Bank of New York and Guild 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 Guild Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Guild Holdings.
Diversification Opportunities for Bank of New York and Guild Holdings
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Guild is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Guild Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guild Holdings 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 Guild Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guild Holdings has no effect on the direction of Bank of New York i.e., Bank of New York and Guild Holdings go up and down completely randomly.
Pair Corralation between Bank of New York and Guild Holdings
Allowing for the 90-day total investment horizon Bank of New is expected to generate 0.42 times more return on investment than Guild Holdings. However, Bank of New is 2.41 times less risky than Guild Holdings. It trades about 0.16 of its potential returns per unit of risk. Guild Holdings Co is currently generating about 0.04 per unit of risk. If you would invest 4,179 in Bank of New on August 31, 2024 and sell it today you would earn a total of 4,008 from holding Bank of New or generate 95.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of New vs. Guild Holdings Co
Performance |
| Timeline |
| Bank of New York |
| Guild Holdings |
Bank of New York and Guild Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Guild Holdings
The main advantage of trading using opposite Bank of New York and Guild Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Guild 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 Guild Holdings will offset losses from the drop in Guild 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 |
| Guild Holdings vs. CNFinance Holdings | Guild Holdings vs. Security National Financial | Guild Holdings vs. Encore Capital Group | Guild Holdings vs. UWM Holdings Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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