Correlation Between Pcm Fund and Bank of New York

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

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

Diversification Opportunities for Pcm Fund and Bank of New York

0.74

Correlation Coefficient

Pcm Fund  Bank of New York

Poor diversification

The 3 months correlation between Pcm and Bank is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pcm Fund 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 and Pcm Fund 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 Pcm Fund are associated (or correlated) with Bank of New York. 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 has no effect on the direction of Pcm Fund i.e., Pcm Fund and Bank of New York go up and down completely randomly.

Pair Corralation between Pcm Fund and Bank of New York

Considering the 90-day investment horizon Pcm Fund is expected to under-perform the Bank of New York. But the fund apears to be less risky and, when comparing its historical volatility, Pcm Fund is 1.93 times less risky than Bank of New York. The fund trades about -0.02 of its potential returns per unit of risk. The The Bank of is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,745  in The Bank of on February 22, 2025 and sell it today you would earn a total of  173.00  from holding The Bank of or generate 1.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Pcm Fund  vs.  The Bank of

Pcm Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pcm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy fundamental indicators, Pcm Fund is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Bank of New York

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Bank of are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Bank of New York is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Pcm Fund and Bank of New York

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

The idea behind Pcm Fund 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.