Correlation Between Bank of New York Mellon and Lennox International

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank of New York Mellon and Lennox International 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 Lennox International 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 Lennox International, you can compare the effects of market volatilities on Bank of New York Mellon and Lennox International 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 Lennox International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York Mellon and Lennox International.

Diversification Opportunities for Bank of New York Mellon and Lennox International

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Bank and Lennox is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Lennox International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennox International 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 Lennox International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennox International has no effect on the direction of Bank of New York Mellon i.e., Bank of New York Mellon and Lennox International go up and down completely randomly.

Pair Corralation between Bank of New York Mellon and Lennox International

Assuming the 90 days horizon The Bank of is expected to generate 1.04 times more return on investment than Lennox International. However, Bank of New York Mellon is 1.04 times more volatile than Lennox International. It trades about 0.23 of its potential returns per unit of risk. Lennox International is currently generating about 0.19 per unit of risk. If you would invest  7,452  in The Bank of on October 21, 2024 and sell it today you would earn a total of  494.00  from holding The Bank of or generate 6.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

The Bank of  vs.  Lennox International

 Performance 
       Timeline  
Bank of New York Mellon 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Bank of are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Bank of New York Mellon reported solid returns over the last few months and may actually be approaching a breakup point.
Lennox International 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lennox International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Lennox International reported solid returns over the last few months and may actually be approaching a breakup point.

Bank of New York Mellon and Lennox International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank of New York Mellon and Lennox International

The main advantage of trading using opposite Bank of New York Mellon and Lennox International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York Mellon position performs unexpectedly, Lennox International 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 Lennox International will offset losses from the drop in Lennox International's long position.
The idea behind The Bank of and Lennox International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk