Two Equities Correlation Analysis
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BK
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Bank of New York and NYSE Composite
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and NYSE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Bank of New York 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 Bank of New are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Bank of New York i.e., Bank of New York and NYSE Composite go up and down completely randomly.
Pair Corralation between Bank of New York and NYSE Composite
Allowing for the 90-day total investment horizon Bank of New is expected to generate 1.86 times more return on investment than NYSE Composite. However, Bank of New York is 1.86 times more volatile than NYSE Composite. It trades about -0.06 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.27 per unit of risk. If you would invest 5,615 in Bank of New on January 20, 2024 and sell it today you would lose (90.00) from holding Bank of New or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of New vs. NYSE Composite
Performance |
| Timeline |
Bank of New York and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Bank of New
Pair trading matchups for Bank of New York
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Bank of New York and NYSE Composite
The main advantage of trading using opposite Bank of New York and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Bank of New York vs. Northern Trust | Bank of New York vs. Invesco Plc | Bank of New York vs. Franklin Resources | Bank of New York vs. T Rowe Price |
| NYSE Composite vs. Dine Brands Global | NYSE Composite vs. BJs Restaurants | NYSE Composite vs. Chipotle Mexican Grill | NYSE Composite vs. Shake Shack |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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