Correlation Between Gmo Small and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Gmo Small 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 Gmo Small and Bny Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Small Cap and Bny Mellon Income, you can compare the effects of market volatilities on Gmo Small 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 Gmo Small with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Small and Bny Mellon.
Diversification Opportunities for Gmo Small and Bny Mellon
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and Bny is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Small Cap and Bny Mellon Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Income and Gmo Small 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 Gmo Small Cap 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 Income has no effect on the direction of Gmo Small i.e., Gmo Small and Bny Mellon go up and down completely randomly.
Pair Corralation between Gmo Small and Bny Mellon
Assuming the 90 days horizon Gmo Small is expected to generate 1.21 times less return on investment than Bny Mellon. In addition to that, Gmo Small is 1.73 times more volatile than Bny Mellon Income. It trades about 0.08 of its total potential returns per unit of risk. Bny Mellon Income is currently generating about 0.16 per unit of volatility. If you would invest 763.00 in Bny Mellon Income on September 1, 2024 and sell it today you would earn a total of 112.00 from holding Bny Mellon Income or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gmo Small Cap vs. Bny Mellon Income
Performance |
| Timeline |
| Gmo Small Cap |
| Bny Mellon Income |
Gmo Small and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Small and Bny Mellon
The main advantage of trading using opposite Gmo Small and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Small 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.| Gmo Small vs. Gmo E Plus | Gmo Small vs. Gmo Trust | Gmo Small vs. Gmo Treasury Fund | Gmo Small vs. Gmo Emerging Markets |
| Bny Mellon vs. Bny Mellon Massachusetts | Bny Mellon vs. Bny Mellon Massachusetts | Bny Mellon vs. Bny Mellon New | Bny Mellon vs. Bny Mellon New |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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