Correlation Between Cutler Equity and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Cutler Equity and Bny Mellon 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 Cutler Equity and Bny Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Bny Mellon National, you can compare the effects of market volatilities on Cutler Equity and Bny Mellon 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 Cutler Equity with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Bny Mellon.
Diversification Opportunities for Cutler Equity and Bny Mellon
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cutler and Bny is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and Bny Mellon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon National and Cutler Equity 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 Cutler Equity are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon National has no effect on the direction of Cutler Equity i.e., Cutler Equity and Bny Mellon go up and down completely randomly.
Pair Corralation between Cutler Equity and Bny Mellon
Assuming the 90 days horizon Cutler Equity is expected to generate 2.88 times more return on investment than Bny Mellon. However, Cutler Equity is 2.88 times more volatile than Bny Mellon National. It trades about 0.24 of its potential returns per unit of risk. Bny Mellon National is currently generating about 0.22 per unit of risk. If you would invest 2,823 in Cutler Equity on August 30, 2024 and sell it today you would earn a total of 111.00 from holding Cutler Equity or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. Bny Mellon National
Performance |
| Timeline |
| Cutler Equity |
| Bny Mellon National |
Cutler Equity and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Bny Mellon
The main advantage of trading using opposite Cutler Equity and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's long position.| Cutler Equity vs. 1919 Financial Services | Cutler Equity vs. Mesirow Financial Small | Cutler Equity vs. Vanguard Financials Index | Cutler Equity vs. Gabelli Global Financial |
| Bny Mellon vs. Franklin Natural Resources | Bny Mellon vs. Dreyfus Natural Resources | Bny Mellon vs. Oil Gas Ultrasector | Bny Mellon vs. Goldman Sachs Mlp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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