Correlation Between Bank of America and Zinus
Can any of the company-specific risk be diversified away by investing in both Bank of America and Zinus 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 Zinus 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 Zinus Inc, you can compare the effects of market volatilities on Bank of America and Zinus 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 Zinus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Zinus.
Diversification Opportunities for Bank of America and Zinus
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Zinus is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Zinus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinus Inc 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 Zinus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinus Inc has no effect on the direction of Bank of America i.e., Bank of America and Zinus go up and down completely randomly.
Pair Corralation between Bank of America and Zinus
Considering the 90-day investment horizon Bank of America is expected to under-perform the Zinus. But the stock apears to be less risky and, when comparing its historical volatility, Bank of America is 3.65 times less risky than Zinus. The stock trades about -0.03 of its potential returns per unit of risk. The Zinus Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,947,000 in Zinus Inc on October 26, 2024 and sell it today you would earn a total of 173,000 from holding Zinus Inc or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.86% |
| Values | Daily Returns |
Bank of America vs. Zinus Inc
Performance |
| Timeline |
| Bank of America |
| Zinus Inc |
Bank of America and Zinus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Zinus
The main advantage of trading using opposite Bank of America and Zinus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Zinus 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 Zinus will offset losses from the drop in Zinus' long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| Zinus vs. Grand Korea Leisure | Zinus vs. Alton Sports CoLtd | Zinus vs. Samyung Trading Co | Zinus vs. PlayD 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |