Correlation Between Pimco New and Bny Mellon

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

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

Diversification Opportunities for Pimco New and Bny Mellon

0.81

Correlation Coefficient

Pimco New  Bny Mellon

Very poor diversification

The 3 months correlation between Pimco and Bny is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Pimco New York 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 Pimco New 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 Pimco New York 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 Pimco New i.e., Pimco New and Bny Mellon go up and down completely randomly.

Pair Corralation between Pimco New and Bny Mellon

Considering the 90-day investment horizon Pimco New York is expected to under-perform the Bny Mellon. In addition to that, Pimco New is 1.17 times more volatile than Bny Mellon Municipalome. It trades about 0.0 of its total potential returns per unit of risk. Bny Mellon Municipalome is currently generating about 0.06 per unit of volatility. If you would invest  595.00  in Bny Mellon Municipalome on December 2, 2024 and sell it today you would earn a total of  123.00  from holding Bny Mellon Municipalome or generate 20.67% return on investment over 90 days.

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

Pimco New York  vs.  Bny Mellon Municipalome

Pimco New York

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pimco New York has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Pimco New is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Bny Mellon Municipalome

Risk-Adjusted Performance

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 Pimco New and Bny Mellon

The main advantage of trading using opposite Pimco New and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco New 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 Pimco New York 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.