Correlation Between Stellar and Bny Mellon

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

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

Diversification Opportunities for Stellar and Bny Mellon

-0.02

Correlation Coefficient

Stellar  Bny Mellon

Good diversification

The 3 months correlation between Stellar and Bny is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Bny Mellon Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Porate and Stellar 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 Stellar 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 Porate has no effect on the direction of Stellar i.e., Stellar and Bny Mellon go up and down completely randomly.

Pair Corralation between Stellar and Bny Mellon

Assuming the 90 days trading horizon Stellar is expected to generate 27.66 times more return on investment than Bny Mellon. However, Stellar is 27.66 times more volatile than Bny Mellon Porate. It trades about 0.1 of its potential returns per unit of risk. Bny Mellon Porate is currently generating about 0.07 per unit of risk. If you would invest  8.90  in Stellar on October 10, 2024 and sell it today you would earn a total of  33.10  from holding Stellar or generate 371.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	59.8%
Values	Daily Returns

Stellar  vs.  Bny Mellon Porate

Stellar

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bny Mellon Porate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bny Mellon Porate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary 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 Stellar and Bny Mellon

The main advantage of trading using opposite Stellar and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar 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 Stellar and Bny Mellon Porate 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.