Correlation Between Bank of America and ZINZINO AB
Can any of the company-specific risk be diversified away by investing in both Bank of America and ZINZINO AB 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 ZINZINO AB 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 ZINZINO AB B, you can compare the effects of market volatilities on Bank of America and ZINZINO AB 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 ZINZINO AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ZINZINO AB.
Diversification Opportunities for Bank of America and ZINZINO AB
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and ZINZINO is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ZINZINO AB B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINZINO AB B 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 ZINZINO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINZINO AB B has no effect on the direction of Bank of America i.e., Bank of America and ZINZINO AB go up and down completely randomly.
Pair Corralation between Bank of America and ZINZINO AB
Considering the 90-day investment horizon Bank of America is expected to generate 2.84 times less return on investment than ZINZINO AB. But when comparing it to its historical volatility, Bank of America is 3.48 times less risky than ZINZINO AB. It trades about 0.1 of its potential returns per unit of risk. ZINZINO AB B is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 224.00 in ZINZINO AB B on August 31, 2024 and sell it today you would earn a total of 526.00 from holding ZINZINO AB B or generate 234.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.16% |
| Values | Daily Returns |
Bank of America vs. ZINZINO AB B
Performance |
| Timeline |
| Bank of America |
| ZINZINO AB B |
Bank of America and ZINZINO AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ZINZINO AB
The main advantage of trading using opposite Bank of America and ZINZINO AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ZINZINO AB 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 ZINZINO AB will offset losses from the drop in ZINZINO AB'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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