Correlation Between Bank of America and Americafirst Tactical
Can any of the company-specific risk be diversified away by investing in both Bank of America and Americafirst Tactical 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 Americafirst Tactical 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 Americafirst Tactical Alpha, you can compare the effects of market volatilities on Bank of America and Americafirst Tactical 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 Americafirst Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Americafirst Tactical.
Diversification Opportunities for Bank of America and Americafirst Tactical
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Americafirst is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Americafirst Tactical Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americafirst Tactical 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 Americafirst Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americafirst Tactical has no effect on the direction of Bank of America i.e., Bank of America and Americafirst Tactical go up and down completely randomly.
Pair Corralation between Bank of America and Americafirst Tactical
Considering the 90-day investment horizon Bank of America is expected to generate 1.33 times more return on investment than Americafirst Tactical. However, Bank of America is 1.33 times more volatile than Americafirst Tactical Alpha. It trades about 0.27 of its potential returns per unit of risk. Americafirst Tactical Alpha is currently generating about 0.19 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Americafirst Tactical Alpha
Performance |
| Timeline |
| Bank of America |
| Americafirst Tactical |
Bank of America and Americafirst Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Americafirst Tactical
The main advantage of trading using opposite Bank of America and Americafirst Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Americafirst Tactical 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 Americafirst Tactical will offset losses from the drop in Americafirst Tactical's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| Americafirst Tactical vs. California Bond Fund | Americafirst Tactical vs. Bbh Intermediate Municipal | Americafirst Tactical vs. T Rowe Price | Americafirst Tactical vs. Astor Longshort Fund |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |