Correlation Between Bank of America and INPOST SA
Can any of the company-specific risk be diversified away by investing in both Bank of America and INPOST SA 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 INPOST SA 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 INPOST SA EO, you can compare the effects of market volatilities on Bank of America and INPOST SA 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 INPOST SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and INPOST SA.
Diversification Opportunities for Bank of America and INPOST SA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and INPOST is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and INPOST SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPOST SA EO 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 INPOST SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPOST SA EO has no effect on the direction of Bank of America i.e., Bank of America and INPOST SA go up and down completely randomly.
Pair Corralation between Bank of America and INPOST SA
Considering the 90-day investment horizon Bank of America is expected to generate 1.11 times less return on investment than INPOST SA. But when comparing it to its historical volatility, Bank of America is 1.4 times less risky than INPOST SA. It trades about 0.11 of its potential returns per unit of risk. INPOST SA EO is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 938.00 in INPOST SA EO on August 30, 2024 and sell it today you would earn a total of 824.00 from holding INPOST SA EO or generate 87.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.01% |
| Values | Daily Returns |
Bank of America vs. INPOST SA EO
Performance |
| Timeline |
| Bank of America |
| INPOST SA EO |
Bank of America and INPOST SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and INPOST SA
The main advantage of trading using opposite Bank of America and INPOST SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, INPOST SA 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 INPOST SA will offset losses from the drop in INPOST SA'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. JPMorgan Chase Co |
| INPOST SA vs. Consolidated Communications Holdings | INPOST SA vs. Ribbon Communications | INPOST SA vs. Thai Beverage Public | INPOST SA vs. COMBA TELECOM SYST |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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