Correlation Between Bank of New York and Tamarack Valley
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Tamarack Valley 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 Tamarack Valley 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 Tamarack Valley Energy, you can compare the effects of market volatilities on Bank of New York and Tamarack Valley 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 Tamarack Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Tamarack Valley.
Diversification Opportunities for Bank of New York and Tamarack Valley
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Tamarack is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Tamarack Valley Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamarack Valley Energy 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 Tamarack Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamarack Valley Energy has no effect on the direction of Bank of New York i.e., Bank of New York and Tamarack Valley go up and down completely randomly.
Pair Corralation between Bank of New York and Tamarack Valley
Allowing for the 90-day total investment horizon Bank of New York is expected to generate 1.55 times less return on investment than Tamarack Valley. But when comparing it to its historical volatility, Bank of New is 2.25 times less risky than Tamarack Valley. It trades about 0.11 of its potential returns per unit of risk. Tamarack Valley Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 306.00 in Tamarack Valley Energy on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Tamarack Valley Energy or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of New vs. Tamarack Valley Energy
Performance |
| Timeline |
| Bank of New York |
| Tamarack Valley Energy |
Bank of New York and Tamarack Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Tamarack Valley
The main advantage of trading using opposite Bank of New York and Tamarack Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Tamarack Valley 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 Tamarack Valley will offset losses from the drop in Tamarack Valley'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 |
| Tamarack Valley vs. Mid Atlantic Home Health | Tamarack Valley vs. Black Hills | Tamarack Valley vs. U Haul Holding | Tamarack Valley vs. United Rentals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |