Correlation Between BNY Mellon and Macquariefirst

Can any of the company-specific risk be diversified away by investing in both BNY Mellon and Macquariefirst 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 Macquariefirst into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BNY Mellon High and Macquariefirst Tr Global, you can compare the effects of market volatilities on BNY Mellon and Macquariefirst 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 Macquariefirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Macquariefirst.

Diversification Opportunities for BNY Mellon and Macquariefirst

0.38

Correlation Coefficient

BNY Mellon  Macquariefirst

Weak diversification

The 3 months correlation between BNY and Macquariefirst is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon High and Macquariefirst Tr Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquariefirst Tr Global 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 High are associated (or correlated) with Macquariefirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquariefirst Tr Global has no effect on the direction of BNY Mellon i.e., BNY Mellon and Macquariefirst go up and down completely randomly.

Pair Corralation between BNY Mellon and Macquariefirst

Considering the 90-day investment horizon BNY Mellon High is expected to generate 1.06 times more return on investment than Macquariefirst. However, BNY Mellon is 1.06 times more volatile than Macquariefirst Tr Global. It trades about 0.1 of its potential returns per unit of risk. Macquariefirst Tr Global is currently generating about 0.02 per unit of risk. If you would invest  250.00  in BNY Mellon High on September 3, 2024 and sell it today you would earn a total of  15.00  from holding BNY Mellon High or generate 6.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	23.44%
Values	Daily Returns

BNY Mellon High  vs.  Macquariefirst Tr Global

BNY Mellon High

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BNY Mellon High are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, BNY Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Macquariefirst Tr Global

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Macquariefirst Tr Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Macquariefirst is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with BNY Mellon and Macquariefirst

The main advantage of trading using opposite BNY Mellon and Macquariefirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, Macquariefirst 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 Macquariefirst will offset losses from the drop in Macquariefirst's long position.

The idea behind BNY Mellon High and Macquariefirst Tr Global 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.