Correlation Between Bank of America and Ramsay Générale
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ramsay Générale 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 Ramsay Générale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verizon Communications and Ramsay Gnrale de, you can compare the effects of market volatilities on Bank of America and Ramsay Générale 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 Ramsay Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ramsay Générale.
Diversification Opportunities for Bank of America and Ramsay Générale
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Ramsay is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and Ramsay Gnrale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Gnrale de 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 Ramsay Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Gnrale de has no effect on the direction of Bank of America i.e., Bank of America and Ramsay Générale go up and down completely randomly.
Pair Corralation between Bank of America and Ramsay Générale
Assuming the 90 days trading horizon Verizon Communications is expected to generate 0.61 times more return on investment than Ramsay Générale. However, Verizon Communications is 1.63 times less risky than Ramsay Générale. It trades about 0.28 of its potential returns per unit of risk. Ramsay Gnrale de is currently generating about -0.38 per unit of risk. If you would invest 3,837 in Verizon Communications on August 27, 2024 and sell it today you would earn a total of 291.00 from holding Verizon Communications or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verizon Communications vs. Ramsay Gnrale de
Performance |
| Timeline |
| Verizon Communications |
| Ramsay Gnrale de |
Bank of America and Ramsay Générale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ramsay Générale
The main advantage of trading using opposite Bank of America and Ramsay Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ramsay Générale 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 Ramsay Générale will offset losses from the drop in Ramsay Générale's long position.| Bank of America vs. MSAD INSURANCE | Bank of America vs. Selective Insurance Group | Bank of America vs. LIFENET INSURANCE CO | Bank of America vs. Singapore Telecommunications Limited |
| Ramsay Générale vs. Siamgas And Petrochemicals | Ramsay Générale vs. Performance Food Group | Ramsay Générale vs. SENECA FOODS A | Ramsay Générale vs. United Natural Foods |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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