Correlation Between Investcorp Credit and Bny Mellon

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

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

Diversification Opportunities for Investcorp Credit and Bny Mellon

0.51

Correlation Coefficient

Investcorp Credit  Bny Mellon

Very weak diversification

The 3 months correlation between Investcorp and Bny is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp Credit Management 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 Investcorp Credit 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 Investcorp Credit Management 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 Investcorp Credit i.e., Investcorp Credit and Bny Mellon go up and down completely randomly.

Pair Corralation between Investcorp Credit and Bny Mellon

Given the investment horizon of 90 days Investcorp Credit Management is expected to generate 2.99 times more return on investment than Bny Mellon. However, Investcorp Credit is 2.99 times more volatile than Bny Mellon Municipalome. It trades about 0.11 of its potential returns per unit of risk. Bny Mellon Municipalome is currently generating about 0.09 per unit of risk. If you would invest  309.00  in Investcorp Credit Management on September 17, 2024 and sell it today you would earn a total of  11.00  from holding Investcorp Credit Management or generate 3.56% return on investment over 90 days.

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

Investcorp Credit Management  vs.  Bny Mellon Municipalome

Investcorp Credit

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Credit Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Investcorp Credit is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bny Mellon Municipalome

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon Municipalome has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Investcorp Credit and Bny Mellon

The main advantage of trading using opposite Investcorp Credit and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investcorp Credit 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 Investcorp Credit Management 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..