Bank of America (Peru) Alpha and Beta Analysis
| BAC Stock | 47.40 0.55 1.17% |
This module allows you to check different measures of market premium (i.e., alpha and beta) for all equities such as Bank of America. It also helps investors analyze the systematic and unsystematic risks associated with investing in Bank of America over a specified time horizon. Remember, high Bank of America's alpha is almost always a sign of good performance; however, a high beta will depend on investors' risk tolerance level and may signal increased volatility and potential future overvaluation. Key technical indicators related to Bank of America's market risk premium analysis include:
Beta (0.27) | Alpha 0.4 | Risk 2.53 | Sharpe Ratio 0.22 | Expected Return 0.56 |
Alpha is a measure of relative performance on a risk-adjusted basis, while beta measures volatility against the benchmark. The goal is to know if an investor is being compensated for the volatility risk taken. The return on investment might be better than its reference but still not compensate for the assumption of the risk.
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Bank of America Market Premiums
Investors always prefer to have the highest possible return on investment, coupled with the lowest possible volatility. Bank of America market risk premium is the additional return an investor will receive from holding Bank of America long position in a well-diversified portfolio. The market premium is part of the Capital Asset Pricing Model (CAPM), which most analysts and investors use to calculate the acceptable rate of return on investment in Bank of America. At the center of the CAPM is the concept of risk and reward, which is usually communicated by investors using alpha and beta measures. Alpha and beta are two of the key measurements used to evaluate Bank of America's performance over market.| α | 0.40 | β | -0.27 |
Bank of America Opportunities
Bank of America Return and Market Media
The Stock did not receive any noticable media coverage during the period. Price Growth (%) |
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About Bank of America Beta and Alpha
For many years both, Alpha and Beta indicators are used by professional money managers as critical performance measurement tools across virtually all financial instruments including Bank or other stocks. Alpha measures the amount that position in Bank of America has returned in comparison to a selected market index or another relevant benchmark. In other words, Alpha is the excess return on an investment relative to the performance of your selected benchmark. Beta, on the other hand, measures the relative risk of your investment.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Bank of America in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Bank of America's short interest history, or implied volatility extrapolated from Bank of America options trading.
Build Portfolio with Bank of America
Your optimized portfolios are the building block of your wealth. We provide an intuitive interface to determine which securities in a portfolio should be removed or rebalanced to achieve better diversification, find the right mix of securities that minimizes portfolio risk for a given return, or maximize portfolio expected return for a given risk level.Build Diversified Portfolios
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Additional Information and Resources on Investing in Bank Stock
When determining whether Bank of America offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Bank of America's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Bank Of America Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Bank Of America Stock:Check out Trending Equities to better understand how to build diversified portfolios. Also, note that the market value of any company could be closely tied with the direction of predictive economic indicators such as signals in bureau of economic analysis. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Bank of America technical stock analysis exercises models and trading practices based on price and volume transformations, such as the moving averages, relative strength index, regressions, price and return correlations, business cycles, stock market cycles, or different charting patterns.