Correlation Between BNY Mellon and Templeton Global
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and Templeton 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 Templeton 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 Templeton Global AD, you can compare the effects of market volatilities on BNY Mellon and Templeton 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Templeton Global.
Diversification Opportunities for BNY Mellon and Templeton Global
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNY and Templeton is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon Global and Templeton Global AD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton 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 Global are associated (or correlated) with Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global has no effect on the direction of BNY Mellon i.e., BNY Mellon and Templeton Global go up and down completely randomly.
Pair Corralation between BNY Mellon and Templeton Global
Assuming the 90 days trading horizon BNY Mellon is expected to generate 129.06 times less return on investment than Templeton Global. But when comparing it to its historical volatility, BNY Mellon Global is 1.47 times less risky than Templeton Global. It trades about 0.0 of its potential returns per unit of risk. Templeton Global AD is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,868 in Templeton Global AD on October 21, 2024 and sell it today you would earn a total of 107.00 from holding Templeton Global AD or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BNY Mellon Global vs. Templeton Global AD
Performance |
| Timeline |
| BNY Mellon Global |
| Templeton Global |
BNY Mellon and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and Templeton Global
The main advantage of trading using opposite BNY Mellon and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, Templeton 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 Templeton Global will offset losses from the drop in Templeton Global's long position.| BNY Mellon vs. Groupama Entreprises N | BNY Mellon vs. Renaissance Europe C | BNY Mellon vs. Superior Plus Corp | BNY Mellon vs. Intel |
| Templeton Global vs. Azvalor Global Value | Templeton Global vs. JPM Global Natural | Templeton Global vs. BGF Global Allocation | Templeton Global vs. Cobas Global PP |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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