Correlation Between IShares Global and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 IShares Global and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Infrastructure and BNY Mellon ETF, you can compare the effects of market volatilities on IShares Global 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 IShares Global with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and BNY Mellon.
Diversification Opportunities for IShares Global and BNY Mellon
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and BNY is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Infrastructure and BNY Mellon ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon ETF and IShares Global 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 iShares Global Infrastructure 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 ETF has no effect on the direction of IShares Global i.e., IShares Global and BNY Mellon go up and down completely randomly.
Pair Corralation between IShares Global and BNY Mellon
Considering the 90-day investment horizon iShares Global Infrastructure is expected to generate 0.88 times more return on investment than BNY Mellon. However, iShares Global Infrastructure is 1.14 times less risky than BNY Mellon. It trades about 0.15 of its potential returns per unit of risk. BNY Mellon ETF is currently generating about 0.08 per unit of risk. If you would invest 4,913 in iShares Global Infrastructure on September 1, 2024 and sell it today you would earn a total of 657.00 from holding iShares Global Infrastructure or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Infrastructure vs. BNY Mellon ETF
Performance |
| Timeline |
| iShares Global Infra |
| BNY Mellon ETF |
IShares Global and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and BNY Mellon
The main advantage of trading using opposite IShares Global and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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.| IShares Global vs. SPDR SP Global | IShares Global vs. FlexShares STOXX Global | IShares Global vs. iShares Infrastructure ETF | IShares Global vs. iShares Global Utilities |
| BNY Mellon vs. First Trust Exchange Traded | BNY Mellon vs. Ultimus Managers Trust | BNY Mellon vs. Horizon Kinetics Medical | BNY Mellon vs. Harbor Health Care |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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