Correlation Between Bank of New York Mellon and PG E
Can any of the company-specific risk be diversified away by investing in both Bank of New York Mellon and PG E 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 PG E 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 PG E P6, you can compare the effects of market volatilities on Bank of New York Mellon and PG E 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 PG E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York Mellon and PG E.
Diversification Opportunities for Bank of New York Mellon and PG E
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and PCG6 is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 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 PG E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of Bank of New York Mellon i.e., Bank of New York Mellon and PG E go up and down completely randomly.
Pair Corralation between Bank of New York Mellon and PG E
Assuming the 90 days horizon The Bank of is expected to generate 0.94 times more return on investment than PG E. However, The Bank of is 1.07 times less risky than PG E. It trades about 0.1 of its potential returns per unit of risk. PG E P6 is currently generating about 0.05 per unit of risk. If you would invest 3,947 in The Bank of on September 3, 2024 and sell it today you would earn a total of 3,858 from holding The Bank of or generate 97.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. PG E P6
Performance |
| Timeline |
| Bank of New York Mellon |
| PG E P6 |
Bank of New York Mellon and PG E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York Mellon and PG E
The main advantage of trading using opposite Bank of New York Mellon and PG E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York Mellon position performs unexpectedly, PG E 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 PG E will offset losses from the drop in PG E's long position.| Bank of New York Mellon vs. TRAINLINE PLC LS | Bank of New York Mellon vs. DFS Furniture PLC | Bank of New York Mellon vs. CENTURIA OFFICE REIT | Bank of New York Mellon vs. Solstad Offshore ASA |
| PG E vs. Ebro Foods SA | PG E vs. Thai Beverage Public | PG E vs. Gaztransport Technigaz SA | PG E vs. SENECA FOODS A |
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 CEOs Directory module to screen CEOs from public companies around the world.
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