Correlation Between Short Oil and Bny Mellon

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

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

Diversification Opportunities for Short Oil and Bny Mellon

-0.35

Correlation Coefficient

Short Oil  Bny Mellon

Very good diversification

The 3 months correlation between Short and Bny is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas and Bny Mellon New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon New and Short Oil 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 Short Oil Gas 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 New has no effect on the direction of Short Oil i.e., Short Oil and Bny Mellon go up and down completely randomly.

Pair Corralation between Short Oil and Bny Mellon

Assuming the 90 days horizon Short Oil Gas is expected to generate 7.33 times more return on investment than Bny Mellon. However, Short Oil is 7.33 times more volatile than Bny Mellon New. It trades about -0.02 of its potential returns per unit of risk. Bny Mellon New is currently generating about -0.36 per unit of risk. If you would invest  1,422  in Short Oil Gas on October 10, 2024 and sell it today you would lose (14.00) from holding Short Oil Gas or give up 0.98% of portfolio value over 90 days.

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

Short Oil Gas  vs.  Bny Mellon New

Short Oil Gas

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Short Oil Gas are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Short Oil is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bny Mellon New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon New has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Bny Mellon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Short Oil and Bny Mellon

The main advantage of trading using opposite Short Oil and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil 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 Short Oil Gas and Bny Mellon New 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.