Correlation Between Bank of America and Senao International
Can any of the company-specific risk be diversified away by investing in both Bank of America and Senao International 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 Senao International 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 Senao International Co, you can compare the effects of market volatilities on Bank of America and Senao International 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 Senao International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Senao International.
Diversification Opportunities for Bank of America and Senao International
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Senao is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Senao International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao International 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 Senao International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao International has no effect on the direction of Bank of America i.e., Bank of America and Senao International go up and down completely randomly.
Pair Corralation between Bank of America and Senao International
Considering the 90-day investment horizon Bank of America is expected to generate 1.85 times more return on investment than Senao International. However, Bank of America is 1.85 times more volatile than Senao International Co. It trades about 0.06 of its potential returns per unit of risk. Senao International Co is currently generating about 0.0 per unit of risk. If you would invest 3,244 in Bank of America on November 19, 2024 and sell it today you would earn a total of 1,452 from holding Bank of America or generate 44.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Bank of America vs. Senao International Co
Performance |
| Timeline |
| Bank of America |
| Senao International |
Bank of America and Senao International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Senao International
The main advantage of trading using opposite Bank of America and Senao International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Senao International 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 Senao International will offset losses from the drop in Senao International's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Senao International vs. Chernan Metal Industrial | Senao International vs. Sunspring Metal Corp | Senao International vs. Sea Sonic Electronics | Senao International vs. Yao Sheng Electronic |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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