Correlation Between Bny Mellon and Select Fund
Can any of the company-specific risk be diversified away by investing in both Bny Mellon and Select Fund 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 Select Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bny Mellon Focused and Select Fund R, you can compare the effects of market volatilities on Bny Mellon and Select Fund 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 Select Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bny Mellon and Select Fund.
Diversification Opportunities for Bny Mellon and Select Fund
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bny and Select is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bny Mellon Focused and Select Fund R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Fund R 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 Focused are associated (or correlated) with Select Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Fund R has no effect on the direction of Bny Mellon i.e., Bny Mellon and Select Fund go up and down completely randomly.
Pair Corralation between Bny Mellon and Select Fund
Assuming the 90 days horizon Bny Mellon is expected to generate 1.28 times less return on investment than Select Fund. But when comparing it to its historical volatility, Bny Mellon Focused is 1.39 times less risky than Select Fund. It trades about 0.07 of its potential returns per unit of risk. Select Fund R is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,178 in Select Fund R on August 30, 2024 and sell it today you would earn a total of 3,339 from holding Select Fund R or generate 40.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.31% |
| Values | Daily Returns |
Bny Mellon Focused vs. Select Fund R
Performance |
| Timeline |
| Bny Mellon Focused |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Select Fund R |
Bny Mellon and Select Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bny Mellon and Select Fund
The main advantage of trading using opposite Bny Mellon and Select Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bny Mellon position performs unexpectedly, Select Fund 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 Select Fund will offset losses from the drop in Select Fund's long position.The idea behind Bny Mellon Focused and Select Fund R pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Select Fund vs. Growth Fund Of | Select Fund vs. HUMANA INC | Select Fund vs. Aquagold International | Select Fund vs. Barloworld Ltd ADR |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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