Correlation Between Bank of America and Southchip Semiconductor
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By analyzing existing cross correlation between Bank of America and Southchip Semiconductor Technology, you can compare the effects of market volatilities on Bank of America and Southchip Semiconductor 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 Southchip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Southchip Semiconductor.
Diversification Opportunities for Bank of America and Southchip Semiconductor
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Southchip is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Southchip Semiconductor Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southchip Semiconductor 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 Southchip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southchip Semiconductor has no effect on the direction of Bank of America i.e., Bank of America and Southchip Semiconductor go up and down completely randomly.
Pair Corralation between Bank of America and Southchip Semiconductor
Considering the 90-day investment horizon Bank of America is expected to generate 2.45 times less return on investment than Southchip Semiconductor. But when comparing it to its historical volatility, Bank of America is 2.92 times less risky than Southchip Semiconductor. It trades about 0.17 of its potential returns per unit of risk. Southchip Semiconductor Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,720 in Southchip Semiconductor Technology on August 31, 2024 and sell it today you would earn a total of 1,048 from holding Southchip Semiconductor Technology or generate 38.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bank of America vs. Southchip Semiconductor Techno
Performance |
| Timeline |
| Bank of America |
| Southchip Semiconductor |
Bank of America and Southchip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Southchip Semiconductor
The main advantage of trading using opposite Bank of America and Southchip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Southchip Semiconductor 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 Southchip Semiconductor will offset losses from the drop in Southchip Semiconductor's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Southchip Semiconductor vs. Guangdong Silvere Sci | Southchip Semiconductor vs. Jinhui Mining Co | Southchip Semiconductor vs. Zhejiang HISUN Biomaterials | Southchip Semiconductor vs. Xinke Material |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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