Correlation Between Select Fund and Bny Mellon

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

By analyzing existing cross correlation between Select Fund C and Bny Mellon Focused, you can compare the effects of market volatilities on Select Fund and Bny Mellon 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 Select Fund with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Fund and Bny Mellon.

Diversification Opportunities for Select Fund and Bny Mellon

0.73

Correlation Coefficient

Select Fund  Bny Mellon

Poor diversification

The 3 months correlation between Select and Bny is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Select Fund C and Bny Mellon Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Focused and Select Fund 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 Select Fund C are associated (or correlated) with Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Focused has no effect on the direction of Select Fund i.e., Select Fund and Bny Mellon go up and down completely randomly.

Pair Corralation between Select Fund and Bny Mellon

If you would invest  8,129  in Select Fund C on September 13, 2024 and sell it today you would earn a total of  1,828  from holding Select Fund C or generate 22.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.4%
Values	Daily Returns

Select Fund C  vs.  Bny Mellon Focused

Select Fund C

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Select Fund C are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Select Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bny Mellon Focused

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon Focused has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Bny Mellon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Select Fund and Bny Mellon

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

The idea behind Select Fund C and Bny Mellon Focused 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.