Correlation Between Bank of New York and Phenixfin
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Phenixfin 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 Phenixfin 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 Phenixfin, you can compare the effects of market volatilities on Bank of New York and Phenixfin 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 Phenixfin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Phenixfin.
Diversification Opportunities for Bank of New York and Phenixfin
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Phenixfin is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Phenixfin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phenixfin 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 Phenixfin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phenixfin has no effect on the direction of Bank of New York i.e., Bank of New York and Phenixfin go up and down completely randomly.
Pair Corralation between Bank of New York and Phenixfin
Allowing for the 90-day total investment horizon Bank of New York is expected to generate 39.9 times less return on investment than Phenixfin. But when comparing it to its historical volatility, Bank of New is 76.2 times less risky than Phenixfin. It trades about 0.16 of its potential returns per unit of risk. Phenixfin is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,248 in Phenixfin on November 3, 2024 and sell it today you would earn a total of 677.00 from holding Phenixfin or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.55% |
| Values | Daily Returns |
Bank of New vs. Phenixfin
Performance |
| Timeline |
| Bank of New York |
| Phenixfin |
Bank of New York and Phenixfin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Phenixfin
The main advantage of trading using opposite Bank of New York and Phenixfin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Phenixfin 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 Phenixfin will offset losses from the drop in Phenixfin'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 |
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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 Stocks Directory module to find actively traded stocks across global markets.
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