Correlation Between Pioneer Floating and BNY Mellon

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

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

Diversification Opportunities for Pioneer Floating and BNY Mellon

0.64

Correlation Coefficient

Pioneer Floating  BNY Mellon

Poor diversification

The 3 months correlation between Pioneer and BNY is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Floating Rate and BNY Mellon High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon High and Pioneer Floating 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 Pioneer Floating Rate 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 High has no effect on the direction of Pioneer Floating i.e., Pioneer Floating and BNY Mellon go up and down completely randomly.

Pair Corralation between Pioneer Floating and BNY Mellon

Considering the 90-day investment horizon Pioneer Floating Rate is expected to under-perform the BNY Mellon. But the etf apears to be less risky and, when comparing its historical volatility, Pioneer Floating Rate is 1.66 times less risky than BNY Mellon. The etf trades about -0.03 of its potential returns per unit of risk. The BNY Mellon High is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  255.00  in BNY Mellon High on December 26, 2024 and sell it today you would earn a total of  0.00  from holding BNY Mellon High or generate 0.0% return on investment over 90 days.

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

Pioneer Floating Rate  vs.  BNY Mellon High

Pioneer Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Pioneer Floating is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BNY Mellon High

Risk-Adjusted Performance

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.

Pair Trading with Pioneer Floating and BNY Mellon

The main advantage of trading using opposite Pioneer Floating and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Floating 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 Pioneer Floating Rate and BNY Mellon 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.