Correlation Between PICKN PAY and Bank of New York Mellon

Can any of the company-specific risk be diversified away by investing in both PICKN PAY and Bank of New York 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 PICKN PAY and Bank of New York Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PICKN PAY STORES and The Bank of, you can compare the effects of market volatilities on PICKN PAY and Bank of New York 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 PICKN PAY with a short position of Bank of New York Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Bank of New York Mellon.

Diversification Opportunities for PICKN PAY and Bank of New York Mellon

-0.2

Correlation Coefficient

PICKN PAY  Bank of New York Mellon

Good diversification

The 3 months correlation between PICKN and Bank is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of New York Mellon and PICKN PAY 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 PICKN PAY STORES are associated (or correlated) with Bank of New York Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of New York Mellon has no effect on the direction of PICKN PAY i.e., PICKN PAY and Bank of New York Mellon go up and down completely randomly.

Pair Corralation between PICKN PAY and Bank of New York Mellon

Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the Bank of New York Mellon. In addition to that, PICKN PAY is 1.68 times more volatile than The Bank of. It trades about -0.05 of its total potential returns per unit of risk. The Bank of is currently generating about 0.03 per unit of volatility. If you would invest  7,409  in The Bank of on December 20, 2024 and sell it today you would earn a total of  171.00  from holding The Bank of or generate 2.31% return on investment over 90 days.

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

PICKN PAY STORES  vs.  The Bank of

PICKN PAY STORES

Risk-Adjusted Performance

Very Weak

Over the last 90 days PICKN PAY STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Bank of New York Mellon

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Bank of are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Bank of New York 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 PICKN PAY and Bank of New York Mellon

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

The idea behind PICKN PAY STORES and The Bank of 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.