Correlation Between BNY Mellon and IShares Currency
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and IShares Currency 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 IShares Currency 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 iShares Currency Hedged, you can compare the effects of market volatilities on BNY Mellon and IShares Currency 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 IShares Currency. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and IShares Currency.
Diversification Opportunities for BNY Mellon and IShares Currency
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNY and IShares is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon High and iShares Currency Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Currency Hedged 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 IShares Currency. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Currency Hedged has no effect on the direction of BNY Mellon i.e., BNY Mellon and IShares Currency go up and down completely randomly.
Pair Corralation between BNY Mellon and IShares Currency
Considering the 90-day investment horizon BNY Mellon High is expected to generate 1.32 times more return on investment than IShares Currency. However, BNY Mellon is 1.32 times more volatile than iShares Currency Hedged. It trades about 0.11 of its potential returns per unit of risk. iShares Currency Hedged is currently generating about -0.09 per unit of risk. If you would invest 256.00 in BNY Mellon High on August 30, 2024 and sell it today you would earn a total of 5.00 from holding BNY Mellon High or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNY Mellon High vs. iShares Currency Hedged
Performance |
| Timeline |
| BNY Mellon High |
| iShares Currency Hedged |
BNY Mellon and IShares Currency Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and IShares Currency
The main advantage of trading using opposite BNY Mellon and IShares Currency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, IShares Currency 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 IShares Currency will offset losses from the drop in IShares Currency'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 |
| IShares Currency vs. ABIVAX Socit Anonyme | IShares Currency vs. HUMANA INC | IShares Currency vs. SCOR PK | IShares Currency vs. Aquagold International |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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