Correlation Between JPM Global and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both JPM 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 JPM 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 JPM Global Natural and BNY Mellon Global, you can compare the effects of market volatilities on JPM 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 JPM Global with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPM Global and BNY Mellon.
Diversification Opportunities for JPM Global and BNY Mellon
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between JPM and BNY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding JPM Global Natural and BNY Mellon Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Global and JPM 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 JPM Global Natural 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 Global has no effect on the direction of JPM Global i.e., JPM Global and BNY Mellon go up and down completely randomly.
Pair Corralation between JPM Global and BNY Mellon
Assuming the 90 days trading horizon JPM Global is expected to generate 1.09 times less return on investment than BNY Mellon. In addition to that, JPM Global is 2.43 times more volatile than BNY Mellon Global. It trades about 0.06 of its total potential returns per unit of risk. BNY Mellon Global is currently generating about 0.15 per unit of volatility. 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 |
JPM Global Natural vs. BNY Mellon Global
Performance |
| Timeline |
| JPM Global Natural |
| BNY Mellon Global |
JPM Global and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPM Global and BNY Mellon
The main advantage of trading using opposite JPM Global and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPM 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.| JPM Global vs. Groupama Entreprises N | JPM Global vs. Renaissance Europe C | JPM Global vs. Superior Plus Corp | JPM Global vs. Origin Agritech |
| 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 |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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