Correlation Between Bank of New York Mellon and PNE AG
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By analyzing existing cross correlation between The Bank of and PNE AG, you can compare the effects of market volatilities on Bank of New York Mellon and PNE AG 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 PNE AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York Mellon and PNE AG.
Diversification Opportunities for Bank of New York Mellon and PNE AG
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and PNE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and PNE AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNE AG 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 PNE AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNE AG has no effect on the direction of Bank of New York Mellon i.e., Bank of New York Mellon and PNE AG go up and down completely randomly.
Pair Corralation between Bank of New York Mellon and PNE AG
Assuming the 90 days horizon The Bank of is expected to under-perform the PNE AG. But the stock apears to be less risky and, when comparing its historical volatility, The Bank of is 1.03 times less risky than PNE AG. The stock trades about -0.08 of its potential returns per unit of risk. The PNE AG is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,208 in PNE AG on December 1, 2024 and sell it today you would earn a total of 110.00 from holding PNE AG or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Bank of vs. PNE AG
Performance |
| Timeline |
| Bank of New York Mellon |
| PNE AG |
Bank of New York Mellon and PNE AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York Mellon and PNE AG
The main advantage of trading using opposite Bank of New York Mellon and PNE AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York Mellon position performs unexpectedly, PNE AG 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 PNE AG will offset losses from the drop in PNE AG's long position.The idea behind The Bank of and PNE AG 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.
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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