Correlation Between BlackRock and Bny Mellon

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

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

Diversification Opportunities for BlackRock and Bny Mellon

-0.6

Correlation Coefficient

BlackRock  Bny Mellon

Excellent diversification

The 3 months correlation between BlackRock and Bny is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock and Bny Mellon Municipalome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Municipalome and BlackRock 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 BlackRock 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 Municipalome has no effect on the direction of BlackRock i.e., BlackRock and Bny Mellon go up and down completely randomly.

Pair Corralation between BlackRock and Bny Mellon

Considering the 90-day investment horizon BlackRock is expected to under-perform the Bny Mellon. In addition to that, BlackRock is 1.83 times more volatile than Bny Mellon Municipalome. It trades about -0.06 of its total potential returns per unit of risk. Bny Mellon Municipalome is currently generating about 0.06 per unit of volatility. If you would invest  696.00  in Bny Mellon Municipalome on December 27, 2024 and sell it today you would earn a total of  21.00  from holding Bny Mellon Municipalome or generate 3.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BlackRock  vs.  Bny Mellon Municipalome

BlackRock

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, BlackRock is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bny Mellon Municipalome

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bny Mellon Municipalome are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Bny Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BlackRock and Bny Mellon

The main advantage of trading using opposite BlackRock and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock 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 BlackRock and Bny Mellon Municipalome 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.