Correlation Between Bank of America and Assicurazioni Generali
Can any of the company-specific risk be diversified away by investing in both Bank of America and Assicurazioni Generali 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 Assicurazioni Generali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and Assicurazioni Generali SpA, you can compare the effects of market volatilities on Bank of America and Assicurazioni Generali 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 Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Assicurazioni Generali.
Diversification Opportunities for Bank of America and Assicurazioni Generali
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Assicurazioni is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali 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 Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of Bank of America i.e., Bank of America and Assicurazioni Generali go up and down completely randomly.
Pair Corralation between Bank of America and Assicurazioni Generali
Assuming the 90 days trading horizon Verizon Communications is expected to generate 0.82 times more return on investment than Assicurazioni Generali. However, Verizon Communications is 1.22 times less risky than Assicurazioni Generali. It trades about 0.3 of its potential returns per unit of risk. Assicurazioni Generali SpA is currently generating about 0.2 per unit of risk. If you would invest 3,906 in Verizon Communications on September 1, 2024 and sell it today you would earn a total of 307.00 from holding Verizon Communications or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Verizon Communications vs. Assicurazioni Generali SpA
Performance |
| Timeline |
| Verizon Communications |
| Assicurazioni Generali |
Bank of America and Assicurazioni Generali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Assicurazioni Generali
The main advantage of trading using opposite Bank of America and Assicurazioni Generali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Assicurazioni Generali 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 Assicurazioni Generali will offset losses from the drop in Assicurazioni Generali's long position.| Bank of America vs. SIVERS SEMICONDUCTORS AB | Bank of America vs. Darden Restaurants | Bank of America vs. Reliance Steel Aluminum | Bank of America vs. Q2M Managementberatung AG |
| Assicurazioni Generali vs. Allianz SE VNA | Assicurazioni Generali vs. AXA SA | Assicurazioni Generali vs. Talanx AG | Assicurazioni Generali vs. UNIQA Insurance Group |
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
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |