Correlation Between Bank of America and Samwha Electronics
Can any of the company-specific risk be diversified away by investing in both Bank of America and Samwha Electronics 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 Samwha Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Samwha Electronics Co, you can compare the effects of market volatilities on Bank of America and Samwha Electronics 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 Samwha Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Samwha Electronics.
Diversification Opportunities for Bank of America and Samwha Electronics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Samwha is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics 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 Bank of America are associated (or correlated) with Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of Bank of America i.e., Bank of America and Samwha Electronics go up and down completely randomly.
Pair Corralation between Bank of America and Samwha Electronics
Considering the 90-day investment horizon Bank of America is expected to generate 0.33 times more return on investment than Samwha Electronics. However, Bank of America is 3.01 times less risky than Samwha Electronics. It trades about 0.26 of its potential returns per unit of risk. Samwha Electronics Co is currently generating about 0.01 per unit of risk. If you would invest 4,262 in Bank of America on August 28, 2024 and sell it today you would earn a total of 488.00 from holding Bank of America or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Samwha Electronics Co
Performance |
| Timeline |
| Bank of America |
| Samwha Electronics |
Bank of America and Samwha Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Samwha Electronics
The main advantage of trading using opposite Bank of America and Samwha Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Samwha Electronics 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 Samwha Electronics will offset losses from the drop in Samwha Electronics' long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Samwha Electronics vs. Organic Special Pet | Samwha Electronics vs. Hyundai Green Food | Samwha Electronics vs. Tamul Multimedia Co | Samwha Electronics vs. SM Entertainment Co |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |