Correlation Between BNY Mellon and Cobas Global

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

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

Diversification Opportunities for BNY Mellon and Cobas Global

0.42

Correlation Coefficient

BNY Mellon  Cobas Global

Very weak diversification

The 3 months correlation between BNY and Cobas is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon Global and Cobas Global PP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cobas Global PP 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 Global are associated (or correlated) with Cobas Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cobas Global PP has no effect on the direction of BNY Mellon i.e., BNY Mellon and Cobas Global go up and down completely randomly.

Pair Corralation between BNY Mellon and Cobas Global

Assuming the 90 days trading horizon BNY Mellon is expected to generate 2.06 times less return on investment than Cobas Global. But when comparing it to its historical volatility, BNY Mellon Global is 1.57 times less risky than Cobas Global. It trades about 0.11 of its potential returns per unit of risk. Cobas Global PP is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  11,782  in Cobas Global PP on October 1, 2024 and sell it today you would earn a total of  441.00  from holding Cobas Global PP or generate 3.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

BNY Mellon Global  vs.  Cobas Global PP

BNY Mellon Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BNY Mellon Global are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, BNY Mellon is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Cobas Global PP

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cobas Global PP are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Cobas Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BNY Mellon and Cobas Global

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

The idea behind BNY Mellon Global and Cobas Global PP 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..