Correlation Between Bank of New York Mellon and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both Bank of New York Mellon and Platinum Investment 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 Platinum Investment 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 Platinum Investment Management, you can compare the effects of market volatilities on Bank of New York Mellon and Platinum Investment 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 Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York Mellon and Platinum Investment.
Diversification Opportunities for Bank of New York Mellon and Platinum Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Platinum is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment 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 Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of Bank of New York Mellon i.e., Bank of New York Mellon and Platinum Investment go up and down completely randomly.
Pair Corralation between Bank of New York Mellon and Platinum Investment
Assuming the 90 days horizon The Bank of is expected to generate 1.16 times more return on investment than Platinum Investment. However, Bank of New York Mellon is 1.16 times more volatile than Platinum Investment Management. It trades about 0.26 of its potential returns per unit of risk. Platinum Investment Management is currently generating about -0.43 per unit of risk. If you would invest 7,022 in The Bank of on August 27, 2024 and sell it today you would earn a total of 644.00 from holding The Bank of or generate 9.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. Platinum Investment Management
Performance |
| Timeline |
| Bank of New York Mellon |
| Platinum Investment |
Bank of New York Mellon and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York Mellon and Platinum Investment
The main advantage of trading using opposite Bank of New York Mellon and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York Mellon position performs unexpectedly, Platinum Investment 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 Platinum Investment will offset losses from the drop in Platinum Investment's long position.| Bank of New York Mellon vs. ELECTRONIC ARTS | Bank of New York Mellon vs. Benchmark Electronics | Bank of New York Mellon vs. Meiko Electronics Co | Bank of New York Mellon vs. Methode Electronics |
| Platinum Investment vs. The Bank of | Platinum Investment vs. Superior Plus Corp | Platinum Investment vs. NMI Holdings | Platinum Investment vs. Origin Agritech |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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