Correlation Between Bank of America and CCL Industries
Can any of the company-specific risk be diversified away by investing in both Bank of America and CCL Industries 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 CCL Industries 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 CCL Industries, you can compare the effects of market volatilities on Bank of America and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CCL Industries.
Diversification Opportunities for Bank of America and CCL Industries
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and CCL is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of Bank of America i.e., Bank of America and CCL Industries go up and down completely randomly.
Pair Corralation between Bank of America and CCL Industries
Considering the 90-day investment horizon Bank of America is expected to generate 1.31 times more return on investment than CCL Industries. However, Bank of America is 1.31 times more volatile than CCL Industries. It trades about 0.31 of its potential returns per unit of risk. CCL Industries is currently generating about -0.12 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Bank of America vs. CCL Industries
Performance |
| Timeline |
| Bank of America |
| CCL Industries |
Bank of America and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CCL Industries
The main advantage of trading using opposite Bank of America and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| CCL Industries vs. SEALED AIR | CCL Industries vs. Ryanair Holdings plc | CCL Industries vs. LION ONE METALS | CCL Industries vs. Western Copper and |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |