Correlation Between BNY Mellon and JPM Global
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and JPM Global 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 JPM Global 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 JPM Global Natural, you can compare the effects of market volatilities on BNY Mellon and JPM Global 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 JPM Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and JPM Global.
Diversification Opportunities for BNY Mellon and JPM Global
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between BNY and JPM is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon Global and JPM Global Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPM Global Natural 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 JPM Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPM Global Natural has no effect on the direction of BNY Mellon i.e., BNY Mellon and JPM Global go up and down completely randomly.
Pair Corralation between BNY Mellon and JPM Global
Assuming the 90 days trading horizon BNY Mellon Global is expected to generate 0.41 times more return on investment than JPM Global. However, BNY Mellon Global is 2.43 times less risky than JPM Global. It trades about 0.15 of its potential returns per unit of risk. JPM Global Natural is currently generating about 0.06 per unit of risk. If you would invest 165.00 in BNY Mellon Global on September 14, 2024 and sell it today you would earn a total of 2.00 from holding BNY Mellon Global or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNY Mellon Global vs. JPM Global Natural
Performance |
| Timeline |
| BNY Mellon Global |
| JPM Global Natural |
BNY Mellon and JPM Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and JPM Global
The main advantage of trading using opposite BNY Mellon and JPM Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, JPM Global 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 JPM Global will offset losses from the drop in JPM Global's long position.| BNY Mellon vs. Lord Abbett Short | BNY Mellon vs. R co Valor F | BNY Mellon vs. Barings Global Umbrella | BNY Mellon vs. iShares Equity Enhanced |
| JPM Global vs. Groupama Entreprises N | JPM Global vs. Renaissance Europe C | JPM Global vs. Superior Plus Corp | JPM Global 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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