Correlation Between Investor and Bank of New York

By analyzing existing cross correlation between Investor Ab Stockhol and Bank Of New, you can compare the effects of market volatilities on Investor 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 Investor with a short position of Bank of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Bank of New York.

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

Diversification Opportunities for Investor and Bank of New York

0.32
  Correlation Coefficient
Investor Ab Stockhol
Bank of New York

Weak diversification

The 3 months correlation between Investor and Bank of New York is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Investor Ab Stockhol 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 Investor 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 Investor Ab Stockhol 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 Investor i.e., Investor and Bank of New York go up and down completely randomly.

Pair Corralation between Investor and Bank of New York

If you would invest (100.00)  in Bank Of New on May 5, 2021 and sell it today you would earn a total of  100.00  from holding Bank Of New or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Investor Ab Stockhol  vs.  Bank Of New

 Performance (%) 
      Timeline 
Investor Ab Stockhol 
 Investor Performance
0 of 100
Over the last 90 days Investor Ab Stockhol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2021. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Investor Price Channel

Bank of New York 
 Bank of New York Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Of New are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking signals, Bank of New York is not utilizing all of its potentials. The new stock price confusion, may contribute to short-horizon losses for the traders.

Bank of New York Price Channel

Investor and Bank of New York Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Investor and Bank of New York

The main advantage of trading using opposite Investor and Bank of New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor 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.
The idea behind Investor Ab Stockhol and Bank Of New 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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