Correlation Between BNY Mellon and Nuveen Global

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

By analyzing existing cross correlation between BNY Mellon High and Nuveen Global High, you can compare the effects of market volatilities on BNY Mellon and Nuveen Global 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 Nuveen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Nuveen Global.

Diversification Opportunities for BNY Mellon and Nuveen Global

0.69

Correlation Coefficient

BNY Mellon  Nuveen Global

Poor diversification

The 3 months correlation between BNY and Nuveen is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon High and Nuveen Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Global High 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 High are associated (or correlated) with Nuveen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Global High has no effect on the direction of BNY Mellon i.e., BNY Mellon and Nuveen Global go up and down completely randomly.

Pair Corralation between BNY Mellon and Nuveen Global

Considering the 90-day investment horizon BNY Mellon High is expected to generate 1.33 times more return on investment than Nuveen Global. However, BNY Mellon is 1.33 times more volatile than Nuveen Global High. It trades about -0.07 of its potential returns per unit of risk. Nuveen Global High is currently generating about -0.15 per unit of risk. If you would invest  262.00  in BNY Mellon High on September 27, 2024 and sell it today you would lose (3.00) from holding BNY Mellon High or give up 1.15% of portfolio value over 90 days.

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

BNY Mellon High  vs.  Nuveen Global High

BNY Mellon High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BNY Mellon High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, BNY Mellon is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nuveen Global High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Global High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Nuveen Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BNY Mellon and Nuveen Global

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

The idea behind BNY Mellon High and Nuveen Global High 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.

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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.