Correlation Between Empire State and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and BNY Mellon Investment, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and BNY Mellon.
Diversification Opportunities for Empire State and BNY Mellon
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and BNY is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and BNY Mellon Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Investment and Empire State 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 Empire State Realty 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 Investment has no effect on the direction of Empire State i.e., Empire State and BNY Mellon go up and down completely randomly.
Pair Corralation between Empire State and BNY Mellon
Given the investment horizon of 90 days Empire State Realty is expected to generate 10.36 times more return on investment than BNY Mellon. However, Empire State is 10.36 times more volatile than BNY Mellon Investment. It trades about 0.06 of its potential returns per unit of risk. BNY Mellon Investment is currently generating about 0.06 per unit of risk. If you would invest 657.00 in Empire State Realty on August 30, 2024 and sell it today you would earn a total of 451.00 from holding Empire State Realty or generate 68.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.11% |
| Values | Daily Returns |
Empire State Realty vs. BNY Mellon Investment
Performance |
| Timeline |
| Empire State Realty |
| BNY Mellon Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Empire State and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and BNY Mellon
The main advantage of trading using opposite Empire State and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| BNY Mellon vs. BNY Mellon Core | BNY Mellon vs. BNY Mellon High | BNY Mellon vs. BNY Mellon International | BNY Mellon vs. BNY Mellon ETF |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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