Correlation Between JPMF Global and BNY Mellon

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

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

Diversification Opportunities for JPMF Global and BNY Mellon

-0.15

Correlation Coefficient

JPMF Global  BNY Mellon

Good diversification

The 3 months correlation between JPMF and BNY is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding JPMF Global Natural and BNY Mellon Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Global and JPMF Global 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 JPMF Global Natural 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 Global has no effect on the direction of JPMF Global i.e., JPMF Global and BNY Mellon go up and down completely randomly.

Pair Corralation between JPMF Global and BNY Mellon

Assuming the 90 days trading horizon JPMF Global Natural is expected to under-perform the BNY Mellon. In addition to that, JPMF Global is 2.47 times more volatile than BNY Mellon Global. It trades about -0.49 of its total potential returns per unit of risk. BNY Mellon Global is currently generating about 0.07 per unit of volatility. If you would invest  165.00  in BNY Mellon Global on September 22, 2024 and sell it today you would earn a total of  1.00  from holding BNY Mellon Global or generate 0.61% return on investment over 90 days.

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

JPMF Global Natural  vs.  BNY Mellon Global

JPMF Global Natural

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JPMF Global Natural has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, JPMF Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BNY Mellon Global

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BNY Mellon Global are ranked lower than 6 (%) 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.

Pair Trading with JPMF Global and BNY Mellon

The main advantage of trading using opposite JPMF Global and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMF Global 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 JPMF Global Natural and BNY Mellon Global 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 CEOs Directory module to screen CEOs from public companies around the world.