Correlation Between BNY Mellon and Themes Global
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and Themes Global 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 BNY Mellon and Themes Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNY Mellon High and Themes Global Systemically, you can compare the effects of market volatilities on BNY Mellon and Themes Global 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 BNY Mellon with a short position of Themes Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Themes Global.
Diversification Opportunities for BNY Mellon and Themes Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNY and Themes is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon High and Themes Global Systemically in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Global System and BNY 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 BNY Mellon High are associated (or correlated) with Themes Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Global System has no effect on the direction of BNY Mellon i.e., BNY Mellon and Themes Global go up and down completely randomly.
Pair Corralation between BNY Mellon and Themes Global
Considering the 90-day investment horizon BNY Mellon is expected to generate 1.95 times less return on investment than Themes Global. But when comparing it to its historical volatility, BNY Mellon High is 1.12 times less risky than Themes Global. It trades about 0.08 of its potential returns per unit of risk. Themes Global Systemically is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,478 in Themes Global Systemically on September 3, 2024 and sell it today you would earn a total of 891.00 from holding Themes Global Systemically or generate 35.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 48.89% |
| Values | Daily Returns |
BNY Mellon High vs. Themes Global Systemically
Performance |
| Timeline |
| BNY Mellon High |
| Themes Global System |
BNY Mellon and Themes Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and Themes Global
The main advantage of trading using opposite BNY Mellon and Themes Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, Themes Global 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 Themes Global will offset losses from the drop in Themes Global's long position.| BNY Mellon vs. Credit Suisse Asset | BNY Mellon vs. Mfs Intermediate High | BNY Mellon vs. Eaton Vance Risk | BNY Mellon vs. Nuveen Floating Rate |
| Themes Global vs. Ultimus Managers Trust | Themes Global vs. American Beacon Select | Themes Global vs. Direxion Daily Regional | Themes Global vs. Direxion Daily SP |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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