Correlation Between BNY Mellon and BGF Euro
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and BGF Euro 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 BGF Euro 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 BGF Euro Markets, you can compare the effects of market volatilities on BNY Mellon and BGF Euro 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 BGF Euro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and BGF Euro.
Diversification Opportunities for BNY Mellon and BGF Euro
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BNY and BGF is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon Global and BGF Euro Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Euro Markets 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 BGF Euro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Euro Markets has no effect on the direction of BNY Mellon i.e., BNY Mellon and BGF Euro go up and down completely randomly.
Pair Corralation between BNY Mellon and BGF Euro
Assuming the 90 days trading horizon BNY Mellon Global is expected to under-perform the BGF Euro. But the fund apears to be less risky and, when comparing its historical volatility, BNY Mellon Global is 1.2 times less risky than BGF Euro. The fund trades about -0.12 of its potential returns per unit of risk. The BGF Euro Markets is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,517 in BGF Euro Markets on October 11, 2024 and sell it today you would earn a total of 79.00 from holding BGF Euro Markets or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNY Mellon Global vs. BGF Euro Markets
Performance |
| Timeline |
| BNY Mellon Global |
| BGF Euro Markets |
BNY Mellon and BGF Euro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and BGF Euro
The main advantage of trading using opposite BNY Mellon and BGF Euro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, BGF Euro 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 BGF Euro will offset losses from the drop in BGF Euro's long position.| BNY Mellon vs. Azvalor Global Value | BNY Mellon vs. JPM Global Natural | BNY Mellon vs. BGF Global Allocation | BNY Mellon vs. Cobas Global PP |
| BGF Euro vs. Groupama Entreprises N | BGF Euro vs. Renaissance Europe C | BGF Euro vs. Superior Plus Corp | BGF Euro vs. Origin Agritech |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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