Correlation Between Bank of New York Mellon and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Bank of New York Mellon and Strategic Investments 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 Mellon and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Bank of and Strategic Investments AS, you can compare the effects of market volatilities on Bank of New York Mellon and Strategic Investments 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 Mellon with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York Mellon and Strategic Investments.
Diversification Opportunities for Bank of New York Mellon and Strategic Investments
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Strategic is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and Bank of New York Mellon 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 The Bank of are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Bank of New York Mellon i.e., Bank of New York Mellon and Strategic Investments go up and down completely randomly.
Pair Corralation between Bank of New York Mellon and Strategic Investments
Assuming the 90 days horizon Bank of New York Mellon is expected to generate 1.25 times less return on investment than Strategic Investments. But when comparing it to its historical volatility, The Bank of is 4.01 times less risky than Strategic Investments. It trades about 0.26 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Strategic Investments AS on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Strategic Investments AS or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. Strategic Investments AS
Performance |
| Timeline |
| Bank of New York Mellon |
| Strategic Investments |
Bank of New York Mellon and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York Mellon and Strategic Investments
The main advantage of trading using opposite Bank of New York Mellon and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York Mellon position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| Bank of New York Mellon vs. Superior Plus Corp | Bank of New York Mellon vs. NMI Holdings | Bank of New York Mellon vs. Origin Agritech | Bank of New York Mellon vs. SIVERS SEMICONDUCTORS AB |
| Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings | Strategic Investments vs. Origin Agritech | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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