Correlation Between Bank of New York and Highest Performances
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Highest Performances 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 Highest Performances 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 Highest Performances Holdings, you can compare the effects of market volatilities on Bank of New York and Highest Performances 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 Highest Performances. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Highest Performances.
Diversification Opportunities for Bank of New York and Highest Performances
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Highest is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Highest Performances Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highest Performances 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 Highest Performances. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highest Performances has no effect on the direction of Bank of New York i.e., Bank of New York and Highest Performances go up and down completely randomly.
Pair Corralation between Bank of New York and Highest Performances
Allowing for the 90-day total investment horizon Bank of New is expected to generate 0.16 times more return on investment than Highest Performances. However, Bank of New is 6.41 times less risky than Highest Performances. It trades about 0.27 of its potential returns per unit of risk. Highest Performances Holdings is currently generating about -0.23 per unit of risk. If you would invest 7,651 in Bank of New on August 29, 2024 and sell it today you would earn a total of 523.00 from holding Bank of New or generate 6.84% 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. Highest Performances Holdings
Performance |
| Timeline |
| Bank of New York |
| Highest Performances |
Bank of New York and Highest Performances Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Highest Performances
The main advantage of trading using opposite Bank of New York and Highest Performances positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Highest Performances 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 Highest Performances will offset losses from the drop in Highest Performances' 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 |
| Highest Performances vs. Sligro Food Group | Highest Performances vs. Canlan Ice Sports | Highest Performances vs. AMCON Distributing | Highest Performances vs. Albertsons Companies |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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