Correlation Between BNY Mellon and Dow Jones
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNY Mellon Global and Dow Jones Industrial, you can compare the effects of market volatilities on BNY Mellon and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Dow Jones.
Diversification Opportunities for BNY Mellon and Dow Jones
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BNY and Dow is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon Global and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Global are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of BNY Mellon i.e., BNY Mellon and Dow Jones go up and down completely randomly.
Pair Corralation between BNY Mellon and Dow Jones
Assuming the 90 days trading horizon BNY Mellon Global is expected to generate 0.72 times more return on investment than Dow Jones. However, BNY Mellon Global is 1.39 times less risky than Dow Jones. It trades about 0.22 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.05 per unit of risk. If you would invest 164.00 in BNY Mellon Global on September 13, 2024 and sell it today you would earn a total of 3.00 from holding BNY Mellon Global or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BNY Mellon Global vs. Dow Jones Industrial
Performance |
| Timeline |
BNY Mellon and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
BNY Mellon Global
Pair trading matchups for BNY Mellon
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with BNY Mellon and Dow Jones
The main advantage of trading using opposite BNY Mellon and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| BNY Mellon vs. Groupama Entreprises N | BNY Mellon vs. Renaissance Europe C | BNY Mellon vs. Superior Plus Corp | BNY Mellon vs. Origin Agritech |
| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |