Correlation Between Bank of New York and WisdomTree
Can any of the company-specific risk be diversified away by investing in both Bank of New York and WisdomTree 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 WisdomTree 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 WisdomTree, you can compare the effects of market volatilities on Bank of New York and WisdomTree 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 WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and WisdomTree.
Diversification Opportunities for Bank of New York and WisdomTree
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and WisdomTree is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Bank of and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of Bank of New York i.e., Bank of New York and WisdomTree go up and down completely randomly.
Pair Corralation between Bank of New York and WisdomTree
Allowing for the 90-day total investment horizon The Bank of is expected to generate 0.71 times more return on investment than WisdomTree. However, The Bank of is 1.4 times less risky than WisdomTree. It trades about 0.15 of its potential returns per unit of risk. WisdomTree is currently generating about -0.07 per unit of risk. If you would invest 10,586 in The Bank of on October 2, 2025 and sell it today you would earn a total of 1,101 from holding The Bank of or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Bank of vs. WisdomTree
Performance |
| Timeline |
| Bank of New York |
| WisdomTree |
Bank of New York and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and WisdomTree
The main advantage of trading using opposite Bank of New York and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree's long position.| Bank of New York vs. Northern Trust | Bank of New York vs. Invesco Plc | Bank of New York vs. Franklin Resources | Bank of New York vs. T Rowe Price |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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