Correlation Between Vastned Retail and Bank of New York Mellon
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Bank of New York 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 Vastned Retail and Bank of New York Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and The Bank of, you can compare the effects of market volatilities on Vastned Retail and Bank of New York 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 Vastned Retail with a short position of Bank of New York Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Bank of New York Mellon.
Diversification Opportunities for Vastned Retail and Bank of New York Mellon
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vastned and Bank is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York Mellon and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with Bank of New York Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of New York Mellon has no effect on the direction of Vastned Retail i.e., Vastned Retail and Bank of New York Mellon go up and down completely randomly.
Pair Corralation between Vastned Retail and Bank of New York Mellon
Assuming the 90 days horizon Vastned Retail NV is expected to under-perform the Bank of New York Mellon. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 1.86 times less risky than Bank of New York Mellon. The stock trades about -0.11 of its potential returns per unit of risk. The The Bank of is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 7,025 in The Bank of on August 24, 2024 and sell it today you would earn a total of 321.00 from holding The Bank of or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. The Bank of
Performance |
| Timeline |
| Vastned Retail NV |
| Bank of New York Mellon |
Vastned Retail and Bank of New York Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Bank of New York Mellon
The main advantage of trading using opposite Vastned Retail and Bank of New York Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Bank of New York 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 Bank of New York Mellon will offset losses from the drop in Bank of New York Mellon's long position.| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Vicinity Centres | Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI Holdings |
| Bank of New York Mellon vs. Retail Estates NV | Bank of New York Mellon vs. Vastned Retail NV | Bank of New York Mellon vs. Ross Stores | Bank of New York Mellon vs. Tower Semiconductor |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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