Correlation Between Bank of America and AIMA Technology
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By analyzing existing cross correlation between Bank of America and AIMA Technology Group, you can compare the effects of market volatilities on Bank of America and AIMA Technology 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 AIMA Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and AIMA Technology.
Diversification Opportunities for Bank of America and AIMA Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and AIMA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and AIMA Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIMA Technology Group 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 AIMA Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIMA Technology Group has no effect on the direction of Bank of America i.e., Bank of America and AIMA Technology go up and down completely randomly.
Pair Corralation between Bank of America and AIMA Technology
Considering the 90-day investment horizon Bank of America is expected to generate 0.6 times more return on investment than AIMA Technology. However, Bank of America is 1.66 times less risky than AIMA Technology. It trades about 0.1 of its potential returns per unit of risk. AIMA Technology Group is currently generating about 0.02 per unit of risk. If you would invest 2,824 in Bank of America on September 1, 2024 and sell it today you would earn a total of 1,927 from holding Bank of America or generate 68.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.24% |
| Values | Daily Returns |
Bank of America vs. AIMA Technology Group
Performance |
| Timeline |
| Bank of America |
| AIMA Technology Group |
Bank of America and AIMA Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and AIMA Technology
The main advantage of trading using opposite Bank of America and AIMA Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, AIMA Technology 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 AIMA Technology will offset losses from the drop in AIMA Technology's long position.| Bank of America vs. Citigroup | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. JPMorgan Chase Co |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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