Correlation Between Bank of America and EZconn Corp
Can any of the company-specific risk be diversified away by investing in both Bank of America and EZconn Corp 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 EZconn Corp 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 EZconn Corp, you can compare the effects of market volatilities on Bank of America and EZconn Corp 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 EZconn Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and EZconn Corp.
Diversification Opportunities for Bank of America and EZconn Corp
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and EZconn is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and EZconn Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZconn Corp 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 EZconn Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZconn Corp has no effect on the direction of Bank of America i.e., Bank of America and EZconn Corp go up and down completely randomly.
Pair Corralation between Bank of America and EZconn Corp
Considering the 90-day investment horizon Bank of America is expected to generate 6.71 times less return on investment than EZconn Corp. But when comparing it to its historical volatility, Bank of America is 2.62 times less risky than EZconn Corp. It trades about 0.06 of its potential returns per unit of risk. EZconn Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,535 in EZconn Corp on September 3, 2024 and sell it today you would earn a total of 45,115 from holding EZconn Corp or generate 994.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.63% |
| Values | Daily Returns |
Bank of America vs. EZconn Corp
Performance |
| Timeline |
| Bank of America |
| EZconn Corp |
Bank of America and EZconn Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and EZconn Corp
The main advantage of trading using opposite Bank of America and EZconn Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, EZconn Corp 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 EZconn Corp will offset losses from the drop in EZconn Corp's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| EZconn Corp vs. PCL Technologies | EZconn Corp vs. CyberTAN Technology | EZconn Corp vs. Arcadyan Technology Corp | EZconn Corp vs. Gemtek Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |