Correlation Between Bank of America and GALENA MINING
Can any of the company-specific risk be diversified away by investing in both Bank of America and GALENA MINING 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 GALENA MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and GALENA MINING LTD, you can compare the effects of market volatilities on Bank of America and GALENA MINING 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 GALENA MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and GALENA MINING.
Diversification Opportunities for Bank of America and GALENA MINING
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and GALENA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and GALENA MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALENA MINING LTD 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 GALENA MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALENA MINING LTD has no effect on the direction of Bank of America i.e., Bank of America and GALENA MINING go up and down completely randomly.
Pair Corralation between Bank of America and GALENA MINING
Assuming the 90 days trading horizon Verizon Communications is expected to generate 1.22 times more return on investment than GALENA MINING. However, Bank of America is 1.22 times more volatile than GALENA MINING LTD. It trades about 0.07 of its potential returns per unit of risk. GALENA MINING LTD is currently generating about 0.05 per unit of risk. If you would invest 3,132 in Verizon Communications on September 20, 2024 and sell it today you would earn a total of 747.00 from holding Verizon Communications or generate 23.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Verizon Communications vs. GALENA MINING LTD
Performance |
| Timeline |
| Verizon Communications |
| GALENA MINING LTD |
Bank of America and GALENA MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and GALENA MINING
The main advantage of trading using opposite Bank of America and GALENA MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, GALENA MINING 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 GALENA MINING will offset losses from the drop in GALENA MINING's long position.| Bank of America vs. CAL MAINE FOODS | Bank of America vs. LIFEWAY FOODS | Bank of America vs. SENECA FOODS A | Bank of America vs. Collins Foods Limited |
| GALENA MINING vs. TT Electronics PLC | GALENA MINING vs. MAVEN WIRELESS SWEDEN | GALENA MINING vs. SCOTT TECHNOLOGY | GALENA MINING vs. METHODE ELECTRONICS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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