Correlation Between Bank of New York and Everest

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

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

Diversification Opportunities for Bank of New York and Everest

-0.65

Correlation Coefficient

Bank of New York  Everest

Excellent diversification

The 3 months correlation between Bank and Everest is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group and Bank of New York 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 The Bank of are associated (or correlated) with Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of Bank of New York i.e., Bank of New York and Everest go up and down completely randomly.

Pair Corralation between Bank of New York and Everest

Allowing for the 90-day total investment horizon The Bank of is expected to generate 0.81 times more return on investment than Everest. However, The Bank of is 1.23 times less risky than Everest. It trades about 0.31 of its potential returns per unit of risk. Everest Group is currently generating about -0.04 per unit of risk. If you would invest  8,247  in The Bank of on May 6, 2025 and sell it today you would earn a total of  1,734  from holding The Bank of or generate 21.03% return on investment over 90 days.

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

The Bank of  vs.  Everest Group

Bank of New York

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Bank of are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain forward-looking signals, Bank of New York disclosed solid returns over the last few months and may actually be approaching a breakup point.

Everest Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Everest Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Everest is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bank of New York and Everest

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

The idea behind The Bank of and Everest Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.