Correlation Between BNY Mellon and JPMorgan International

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

By analyzing existing cross correlation between BNY Mellon ETF and JPMorgan International Growth, you can compare the effects of market volatilities on BNY Mellon and JPMorgan International 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 BNY Mellon with a short position of JPMorgan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and JPMorgan International.

Diversification Opportunities for BNY Mellon and JPMorgan International

0.53

Correlation Coefficient

BNY Mellon  JPMorgan International

Very weak diversification

The 3 months correlation between BNY and JPMorgan is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon ETF and JPMorgan International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan International and BNY Mellon 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 BNY Mellon ETF are associated (or correlated) with JPMorgan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan International has no effect on the direction of BNY Mellon i.e., BNY Mellon and JPMorgan International go up and down completely randomly.

Pair Corralation between BNY Mellon and JPMorgan International

Given the investment horizon of 90 days BNY Mellon ETF is expected to generate 0.93 times more return on investment than JPMorgan International. However, BNY Mellon ETF is 1.07 times less risky than JPMorgan International. It trades about -0.24 of its potential returns per unit of risk. JPMorgan International Growth is currently generating about -0.27 per unit of risk. If you would invest  4,961  in BNY Mellon ETF on October 11, 2024 and sell it today you would lose (166.00) from holding BNY Mellon ETF or give up 3.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

BNY Mellon ETF  vs.  JPMorgan International Growth

BNY Mellon ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNY Mellon ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Etf's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

JPMorgan International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMorgan International Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Etf's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the Exchange Traded Fund stockholders.

Pair Trading with BNY Mellon and JPMorgan International

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

The idea behind BNY Mellon ETF and JPMorgan International Growth 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.