Correlation Between Bank of New York and Pineapple Financial
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Pineapple Financial 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 Bank of New York and Pineapple Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of New and Pineapple Financial, you can compare the effects of market volatilities on Bank of New York and Pineapple Financial 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 Bank of New York with a short position of Pineapple Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Pineapple Financial.
Diversification Opportunities for Bank of New York and Pineapple Financial
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Pineapple is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Pineapple Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pineapple Financial 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 Pineapple Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pineapple Financial has no effect on the direction of Bank of New York i.e., Bank of New York and Pineapple Financial go up and down completely randomly.
Pair Corralation between Bank of New York and Pineapple Financial
Allowing for the 90-day total investment horizon Bank of New is expected to generate 0.18 times more return on investment than Pineapple Financial. However, Bank of New is 5.49 times less risky than Pineapple Financial. It trades about 0.24 of its potential returns per unit of risk. Pineapple Financial is currently generating about -0.11 per unit of risk. If you would invest 6,828 in Bank of New on September 13, 2024 and sell it today you would earn a total of 1,139 from holding Bank of New or generate 16.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of New vs. Pineapple Financial
Performance |
Timeline |
Bank of New York |
Pineapple Financial |
Bank of New York and Pineapple Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of New York and Pineapple Financial
The main advantage of trading using opposite Bank of New York and Pineapple Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Pineapple Financial 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 Pineapple Financial will offset losses from the drop in Pineapple Financial'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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