Correlation Between Investor and Bank of New York
Can any of the company-specific risk be diversified away by investing in both Investor and Bank of New York 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 Investor and Bank of New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB and Bank of New, you can compare the effects of market volatilities on Investor and Bank of New York 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 Investor with a short position of Bank of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Bank of New York.
Diversification Opportunities for Investor and Bank of New York
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Investor and Bank is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB and Bank of New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York and Investor 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 Investor AB are associated (or correlated) with Bank of New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of New York has no effect on the direction of Investor i.e., Investor and Bank of New York go up and down completely randomly.
Pair Corralation between Investor and Bank of New York
Assuming the 90 days horizon Investor AB is expected to under-perform the Bank of New York. In addition to that, Investor is 1.05 times more volatile than Bank of New. It trades about -0.21 of its total potential returns per unit of risk. Bank of New is currently generating about 0.13 per unit of volatility. If you would invest 7,637 in Bank of New on August 24, 2024 and sell it today you would earn a total of 251.00 from holding Bank of New or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investor AB vs. Bank of New
Performance |
| Timeline |
| Investor AB |
| Bank of New York |
Investor and Bank of New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Bank of New York
The main advantage of trading using opposite Investor and Bank of New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor position performs unexpectedly, Bank of New York 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 Bank of New York will offset losses from the drop in Bank of New York's long position.| Investor vs. Brookfield Real Assets | Investor vs. T Rowe Price | Investor vs. Ares Capital | Investor vs. BlackRock |
| Bank of New York vs. Northern Trust | Bank of New York vs. Invesco Plc | Bank of New York vs. Franklin Resources | Bank of New York vs. T Rowe Price |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |