Correlation Between Sp Smallcap and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Sp Smallcap 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 Sp Smallcap and Bny Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Smallcap 600 and Bny Mellon Intermediate, you can compare the effects of market volatilities on Sp Smallcap 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 Sp Smallcap with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Bny Mellon.
Diversification Opportunities for Sp Smallcap and Bny Mellon
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RYYCX and Bny is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Bny Mellon Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Intermediate and Sp Smallcap 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 Sp Smallcap 600 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 Intermediate has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Bny Mellon go up and down completely randomly.
Pair Corralation between Sp Smallcap and Bny Mellon
Assuming the 90 days horizon Sp Smallcap 600 is expected to under-perform the Bny Mellon. In addition to that, Sp Smallcap is 6.76 times more volatile than Bny Mellon Intermediate. It trades about -0.31 of its total potential returns per unit of risk. Bny Mellon Intermediate is currently generating about 0.17 per unit of volatility. If you would invest 1,185 in Bny Mellon Intermediate on December 8, 2024 and sell it today you would earn a total of 8.00 from holding Bny Mellon Intermediate or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Smallcap 600 vs. Bny Mellon Intermediate
Performance |
| Timeline |
| Sp Smallcap 600 |
| Bny Mellon Intermediate |
Sp Smallcap and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Smallcap and Bny Mellon
The main advantage of trading using opposite Sp Smallcap and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Smallcap 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.| Sp Smallcap vs. The Gabelli Healthcare | ||
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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.
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