Correlation Between Bank of America and ANTA SPORTS
Can any of the company-specific risk be diversified away by investing in both Bank of America and ANTA SPORTS 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 America and ANTA SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and ANTA SPORTS PRODUCT, you can compare the effects of market volatilities on Bank of America and ANTA SPORTS 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 America with a short position of ANTA SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ANTA SPORTS.
Diversification Opportunities for Bank of America and ANTA SPORTS
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and ANTA is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and ANTA SPORTS PRODUCT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANTA SPORTS PRODUCT and Bank of America 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 Verizon Communications are associated (or correlated) with ANTA SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANTA SPORTS PRODUCT has no effect on the direction of Bank of America i.e., Bank of America and ANTA SPORTS go up and down completely randomly.
Pair Corralation between Bank of America and ANTA SPORTS
Assuming the 90 days trading horizon Bank of America is expected to generate 5.8 times less return on investment than ANTA SPORTS. But when comparing it to its historical volatility, Verizon Communications is 2.93 times less risky than ANTA SPORTS. It trades about 0.04 of its potential returns per unit of risk. ANTA SPORTS PRODUCT is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 703.00 in ANTA SPORTS PRODUCT on October 26, 2024 and sell it today you would earn a total of 253.00 from holding ANTA SPORTS PRODUCT or generate 35.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verizon Communications vs. ANTA SPORTS PRODUCT
Performance |
| Timeline |
| Verizon Communications |
| ANTA SPORTS PRODUCT |
Bank of America and ANTA SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ANTA SPORTS
The main advantage of trading using opposite Bank of America and ANTA SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ANTA SPORTS 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 ANTA SPORTS will offset losses from the drop in ANTA SPORTS's long position.| Bank of America vs. BioNTech SE | Bank of America vs. Uber Technologies | Bank of America vs. AAC TECHNOLOGHLDGADR | Bank of America vs. Aristocrat Leisure Limited |
| ANTA SPORTS vs. Verizon Communications | ANTA SPORTS vs. CITIC Telecom International | ANTA SPORTS vs. Materialise NV | ANTA SPORTS vs. COMBA TELECOM SYST |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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