Correlation Between Monarch Financial and Bank of New York
Can any of the company-specific risk be diversified away by investing in both Monarch Financial and Bank of New York 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 Monarch Financial and Bank of New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monarch Financial Holdings and Bank of New, you can compare the effects of market volatilities on Monarch Financial and Bank of New York 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 Monarch Financial with a short position of Bank of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monarch Financial and Bank of New York.
Diversification Opportunities for Monarch Financial and Bank of New York
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Monarch and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Monarch Financial Holdings and Bank of New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York and Monarch Financial 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 Monarch Financial Holdings are associated (or correlated) with Bank of New York. 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 has no effect on the direction of Monarch Financial i.e., Monarch Financial and Bank of New York go up and down completely randomly.
Pair Corralation between Monarch Financial and Bank of New York
If you would invest 4,099 in Bank of New on January 20, 2024 and sell it today you would earn a total of 1,426 from holding Bank of New or generate 34.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Monarch Financial Holdings vs. Bank of New
Performance |
| Timeline |
| Monarch Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bank of New York |
Monarch Financial and Bank of New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monarch Financial and Bank of New York
The main advantage of trading using opposite Monarch Financial and Bank of New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monarch Financial position performs unexpectedly, Bank of New York 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 will offset losses from the drop in Bank of New York's long position.| Monarch Financial vs. Xunlei Ltd Adr | Monarch Financial vs. Cimpress NV | Monarch Financial vs. National CineMedia | Monarch Financial vs. Albertsons Companies |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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