Correlation Between Global X and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Infrastructure and BNY Mellon ETF, you can compare the effects of market volatilities on Global X 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 Global X with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and BNY Mellon.
Diversification Opportunities for Global X and BNY Mellon
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and BNY is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Global X 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 Global X 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 Global X 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 Global X i.e., Global X and BNY Mellon go up and down completely randomly.
Pair Corralation between Global X and BNY Mellon
Given the investment horizon of 90 days Global X Infrastructure is expected to under-perform the BNY Mellon. In addition to that, Global X is 1.06 times more volatile than BNY Mellon ETF. It trades about -0.18 of its total potential returns per unit of risk. BNY Mellon ETF is currently generating about -0.06 per unit of volatility. If you would invest 3,153 in BNY Mellon ETF on September 12, 2024 and sell it today you would lose (38.00) from holding BNY Mellon ETF or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Infrastructure vs. BNY Mellon ETF
Performance |
| Timeline |
| Global X Infrastructure |
| BNY Mellon ETF |
Global X and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and BNY Mellon
The main advantage of trading using opposite Global X and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. iShares Infrastructure ETF | Global X vs. Global X Cloud | Global X vs. Global X Cybersecurity | Global X vs. Invesco Dynamic Leisure |
| BNY Mellon vs. First Trust Indxx | BNY Mellon vs. Direxion Daily Industrials | BNY Mellon vs. NATO | BNY Mellon vs. FlexShares STOXX Global |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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