Correlation Between Bank of America and Walton Advanced
Can any of the company-specific risk be diversified away by investing in both Bank of America and Walton Advanced 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 Walton Advanced 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 Walton Advanced Engineering, you can compare the effects of market volatilities on Bank of America and Walton Advanced 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 Walton Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Walton Advanced.
Diversification Opportunities for Bank of America and Walton Advanced
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Walton is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Walton Advanced Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walton Advanced Engi 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 Walton Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walton Advanced Engi has no effect on the direction of Bank of America i.e., Bank of America and Walton Advanced go up and down completely randomly.
Pair Corralation between Bank of America and Walton Advanced
Considering the 90-day investment horizon Bank of America is expected to generate 0.69 times more return on investment than Walton Advanced. However, Bank of America is 1.44 times less risky than Walton Advanced. It trades about 0.05 of its potential returns per unit of risk. Walton Advanced Engineering is currently generating about 0.01 per unit of risk. If you would invest 3,337 in Bank of America on November 7, 2024 and sell it today you would earn a total of 1,334 from holding Bank of America or generate 39.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.36% |
| Values | Daily Returns |
Bank of America vs. Walton Advanced Engineering
Performance |
| Timeline |
| Bank of America |
| Walton Advanced Engi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Walton Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Walton Advanced
The main advantage of trading using opposite Bank of America and Walton Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Walton Advanced 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 Walton Advanced will offset losses from the drop in Walton Advanced's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Canadian Imperial Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |