Correlation Between NYSE Composite and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and BNY Mellon Strategic, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and BNY Mellon.
Diversification Opportunities for NYSE Composite and BNY Mellon
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and BNY is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and BNY Mellon Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Strategic and NYSE Composite 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 NYSE Composite 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 Strategic has no effect on the direction of NYSE Composite i.e., NYSE Composite and BNY Mellon go up and down completely randomly.
Pair Corralation between NYSE Composite and BNY Mellon
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the BNY Mellon. But the index apears to be less risky and, when comparing its historical volatility, NYSE Composite is 1.22 times less risky than BNY Mellon. The index trades about -0.07 of its potential returns per unit of risk. The BNY Mellon Strategic is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 631.00 in BNY Mellon Strategic on September 12, 2024 and sell it today you would earn a total of 9.00 from holding BNY Mellon Strategic or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. BNY Mellon Strategic
Performance |
| Timeline |
NYSE Composite and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
BNY Mellon Strategic
Pair trading matchups for BNY Mellon
Pair Trading with NYSE Composite and BNY Mellon
The main advantage of trading using opposite NYSE Composite and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| BNY Mellon vs. Blackrock Muniholdings Closed | BNY Mellon vs. DTF Tax Free | BNY Mellon vs. John Hancock Income | BNY Mellon vs. MFS Investment Grade |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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