Correlation Between Bny Mellon and Aberdeen Standard
Can any of the company-specific risk be diversified away by investing in both Bny Mellon and Aberdeen Standard 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 Aberdeen Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bny Mellon Municipalome and Aberdeen Standard Global, you can compare the effects of market volatilities on Bny Mellon and Aberdeen Standard 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 Aberdeen Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bny Mellon and Aberdeen Standard.
Diversification Opportunities for Bny Mellon and Aberdeen Standard
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bny and Aberdeen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bny Mellon Municipalome and Aberdeen Standard Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Standard Global 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 Municipalome are associated (or correlated) with Aberdeen Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Standard Global has no effect on the direction of Bny Mellon i.e., Bny Mellon and Aberdeen Standard go up and down completely randomly.
Pair Corralation between Bny Mellon and Aberdeen Standard
Considering the 90-day investment horizon Bny Mellon is expected to generate 2.7 times less return on investment than Aberdeen Standard. But when comparing it to its historical volatility, Bny Mellon Municipalome is 1.37 times less risky than Aberdeen Standard. It trades about 0.12 of its potential returns per unit of risk. Aberdeen Standard Global is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,709 in Aberdeen Standard Global on November 9, 2024 and sell it today you would earn a total of 73.00 from holding Aberdeen Standard Global or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bny Mellon Municipalome vs. Aberdeen Standard Global
Performance |
| Timeline |
| Bny Mellon Municipalome |
| Aberdeen Standard Global |
Bny Mellon and Aberdeen Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bny Mellon and Aberdeen Standard
The main advantage of trading using opposite Bny Mellon and Aberdeen Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bny Mellon position performs unexpectedly, Aberdeen Standard 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 Aberdeen Standard will offset losses from the drop in Aberdeen Standard's long position.| Bny Mellon vs. Blackrock Muniyield | Bny Mellon vs. Blackrock Muni Intermediate | Bny Mellon vs. Blackrock Muniyield Quality | Bny Mellon vs. Blackrock Muniyield Quality |
| Aberdeen Standard vs. Blackrock Muniyield Quality | Aberdeen Standard vs. PIMCO Access Income | Aberdeen Standard vs. Nuveen Municipal Credit | Aberdeen Standard vs. Western Asset Diversified |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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