Correlation Between Arbor Metals and Bank of America
Can any of the company-specific risk be diversified away by investing in both Arbor Metals 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 Arbor Metals 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 Arbor Metals Corp and Bank of America, you can compare the effects of market volatilities on Arbor Metals 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 Arbor Metals with a short position of Bank of America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Bank of America.
Diversification Opportunities for Arbor Metals and Bank of America
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arbor and Bank is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp 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 Arbor Metals 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 Arbor Metals Corp 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 Arbor Metals i.e., Arbor Metals and Bank of America go up and down completely randomly.
Pair Corralation between Arbor Metals and Bank of America
Assuming the 90 days horizon Arbor Metals Corp is expected to under-perform the Bank of America. In addition to that, Arbor Metals is 3.0 times more volatile than Bank of America. It trades about -0.49 of its total potential returns per unit of risk. Bank of America is currently generating about -0.29 per unit of volatility. If you would invest 2,461 in Bank of America on September 24, 2024 and sell it today you would lose (162.00) from holding Bank of America or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Metals Corp vs. Bank of America
Performance |
| Timeline |
| Arbor Metals Corp |
| Bank of America |
Arbor Metals and Bank of America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and Bank of America
The main advantage of trading using opposite Arbor Metals and Bank of America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals 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.| Arbor Metals vs. Kiplin Metals | Arbor Metals vs. Pure Energy Minerals | Arbor Metals vs. Noram Lithium Corp | Arbor Metals vs. Minnova Corp |
| Bank of America vs. Precision Drilling | Bank of America vs. Arbor Metals Corp | Bank of America vs. Economic Investment Trust | Bank of America vs. Diversified Royalty Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |