Correlation Between Bny Mellon and CBH

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

By analyzing existing cross correlation between Bny Mellon Municipalome and CBH, you can compare the effects of market volatilities on Bny Mellon and CBH 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 CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bny Mellon and CBH.

Diversification Opportunities for Bny Mellon and CBH

0.08

Correlation Coefficient

Bny Mellon  CBH

Significant diversification

The 3 months correlation between Bny and CBH is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bny Mellon Municipalome and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 Municipalome are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Bny Mellon i.e., Bny Mellon and CBH go up and down completely randomly.

Pair Corralation between Bny Mellon and CBH

Considering the 90-day investment horizon Bny Mellon Municipalome is expected to generate 1.18 times more return on investment than CBH. However, Bny Mellon is 1.18 times more volatile than CBH. It trades about 0.09 of its potential returns per unit of risk. CBH is currently generating about 0.09 per unit of risk. If you would invest  593.00  in Bny Mellon Municipalome on September 14, 2024 and sell it today you would earn a total of  143.00  from holding Bny Mellon Municipalome or generate 24.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.93%
Values	Daily Returns

Bny Mellon Municipalome  vs.  CBH

Bny Mellon Municipalome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon Municipalome has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Bny Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Bny Mellon and CBH

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

The idea behind Bny Mellon Municipalome and CBH 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.