Correlation Between Bank of America and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both Bank of America and Sitronix Technology 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 Sitronix Technology 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 Sitronix Technology Corp, you can compare the effects of market volatilities on Bank of America and Sitronix 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 Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Sitronix Technology.
Diversification Opportunities for Bank of America and Sitronix Technology
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Sitronix is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Sitronix Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitronix Technology 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 Sitronix Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitronix Technology Corp has no effect on the direction of Bank of America i.e., Bank of America and Sitronix Technology go up and down completely randomly.
Pair Corralation between Bank of America and Sitronix Technology
Considering the 90-day investment horizon Bank of America is expected to generate 1.48 times more return on investment than Sitronix Technology. However, Bank of America is 1.48 times more volatile than Sitronix Technology Corp. It trades about 0.31 of its potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.23 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Sitronix Technology Corp
Performance |
| Timeline |
| Bank of America |
| Sitronix Technology Corp |
Bank of America and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Sitronix Technology
The main advantage of trading using opposite Bank of America and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Sitronix 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 Sitronix Technology will offset losses from the drop in Sitronix Technology's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |