Correlation Between Suntory Beverage and Bank of America
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and Bank of America 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 Suntory Beverage and Bank of America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Bank of America, you can compare the effects of market volatilities on Suntory Beverage and Bank of America 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 Suntory Beverage with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Bank of America.
Diversification Opportunities for Suntory Beverage and Bank of America
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Suntory and Bank is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of America and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with Bank of America. 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 America has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and Bank of America go up and down completely randomly.
Pair Corralation between Suntory Beverage and Bank of America
Assuming the 90 days horizon Suntory Beverage is expected to generate 4.52 times less return on investment than Bank of America. In addition to that, Suntory Beverage is 1.12 times more volatile than Bank of America. It trades about 0.02 of its total potential returns per unit of risk. Bank of America is currently generating about 0.11 per unit of volatility. If you would invest 2,539 in Bank of America on September 12, 2024 and sell it today you would earn a total of 1,846 from holding Bank of America or generate 72.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Bank of America
Performance |
| Timeline |
| Suntory Beverage Food |
| Bank of America |
Suntory Beverage and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Bank of America
The main advantage of trading using opposite Suntory Beverage and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, Bank of America 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 America will offset losses from the drop in Bank of America's long position.| Suntory Beverage vs. Superior Plus Corp | Suntory Beverage vs. SIVERS SEMICONDUCTORS AB | Suntory Beverage vs. NorAm Drilling AS | Suntory Beverage vs. Norsk Hydro ASA |
| Bank of America vs. SCANSOURCE | Bank of America vs. Suntory Beverage Food | Bank of America vs. VIVA WINE GROUP | Bank of America vs. Tsingtao Brewery |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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