Correlation Between Bank of America and Ablerex Electronics
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ablerex 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 Ablerex 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 Ablerex Electronics Co, you can compare the effects of market volatilities on Bank of America and Ablerex 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 Ablerex Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ablerex Electronics.
Diversification Opportunities for Bank of America and Ablerex Electronics
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Ablerex is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ablerex Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ablerex 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 Ablerex Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ablerex Electronics has no effect on the direction of Bank of America i.e., Bank of America and Ablerex Electronics go up and down completely randomly.
Pair Corralation between Bank of America and Ablerex Electronics
Considering the 90-day investment horizon Bank of America is expected to under-perform the Ablerex Electronics. In addition to that, Bank of America is 1.01 times more volatile than Ablerex Electronics Co. It trades about -0.34 of its total potential returns per unit of risk. Ablerex Electronics Co is currently generating about 0.2 per unit of volatility. If you would invest 4,330 in Ablerex Electronics Co on November 28, 2024 and sell it today you would earn a total of 130.00 from holding Ablerex Electronics Co or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Bank of America vs. Ablerex Electronics Co
Performance |
| Timeline |
| Bank of America |
| Ablerex Electronics |
Bank of America and Ablerex Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ablerex Electronics
The main advantage of trading using opposite Bank of America and Ablerex Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ablerex 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 Ablerex Electronics will offset losses from the drop in Ablerex Electronics' 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 |
| Ablerex Electronics vs. Hi Lai Foods Co | Ablerex Electronics vs. Louisa Professional Coffee | Ablerex Electronics vs. Standard Foods Corp | Ablerex Electronics vs. Unitech Electronics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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