Correlation Between Bank of America and Impact ISR
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By analyzing existing cross correlation between Bank of America and Impact ISR Performance, you can compare the effects of market volatilities on Bank of America and Impact ISR 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 Impact ISR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Impact ISR.
Diversification Opportunities for Bank of America and Impact ISR
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Impact is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Impact ISR Performance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact ISR Performance 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 Impact ISR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact ISR Performance has no effect on the direction of Bank of America i.e., Bank of America and Impact ISR go up and down completely randomly.
Pair Corralation between Bank of America and Impact ISR
Considering the 90-day investment horizon Bank of America is expected to generate 2.21 times more return on investment than Impact ISR. However, Bank of America is 2.21 times more volatile than Impact ISR Performance. It trades about 0.1 of its potential returns per unit of risk. Impact ISR Performance is currently generating about 0.02 per unit of risk. If you would invest 3,009 in Bank of America on August 26, 2024 and sell it today you would earn a total of 1,691 from holding Bank of America or generate 56.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Bank of America vs. Impact ISR Performance
Performance |
| Timeline |
| Bank of America |
| Impact ISR Performance |
Bank of America and Impact ISR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Impact ISR
The main advantage of trading using opposite Bank of America and Impact ISR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Impact ISR 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 Impact ISR will offset losses from the drop in Impact ISR's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Impact ISR vs. Superior Plus Corp | Impact ISR vs. Intel | Impact ISR vs. Volkswagen AG | Impact ISR vs. Reliance Steel Aluminum |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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