Correlation Between Bank of America and REGION GROUP
Can any of the company-specific risk be diversified away by investing in both Bank of America and REGION GROUP 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 REGION GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and REGION GROUP STAPLED, you can compare the effects of market volatilities on Bank of America and REGION GROUP 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 REGION GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and REGION GROUP.
Diversification Opportunities for Bank of America and REGION GROUP
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and REGION is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and REGION GROUP STAPLED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGION GROUP STAPLED 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 REGION GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGION GROUP STAPLED has no effect on the direction of Bank of America i.e., Bank of America and REGION GROUP go up and down completely randomly.
Pair Corralation between Bank of America and REGION GROUP
Assuming the 90 days trading horizon Verizon Communications is expected to generate 0.97 times more return on investment than REGION GROUP. However, Verizon Communications is 1.03 times less risky than REGION GROUP. It trades about 0.06 of its potential returns per unit of risk. REGION GROUP STAPLED is currently generating about 0.01 per unit of risk. If you would invest 2,923 in Verizon Communications on December 1, 2024 and sell it today you would earn a total of 1,189 from holding Verizon Communications or generate 40.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verizon Communications vs. REGION GROUP STAPLED
Performance |
| Timeline |
| Verizon Communications |
| REGION GROUP STAPLED |
Bank of America and REGION GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and REGION GROUP
The main advantage of trading using opposite Bank of America and REGION GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, REGION GROUP 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 REGION GROUP will offset losses from the drop in REGION GROUP's long position.| Bank of America vs. Gold Road Resources | Bank of America vs. QLEANAIR AB SK 50 | Bank of America vs. Yuexiu Transport Infrastructure | Bank of America vs. KAUFMAN ET BROAD |
| REGION GROUP vs. SmarTone Telecommunications Holdings | REGION GROUP vs. Adtalem Global Education | REGION GROUP vs. Entravision Communications | REGION GROUP vs. American Public Education |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |