Correlation Between Bank of America and Invesco Equity
Can any of the company-specific risk be diversified away by investing in both Bank of America and Invesco Equity 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 Invesco Equity 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 Invesco Equity And, you can compare the effects of market volatilities on Bank of America and Invesco Equity 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 Invesco Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Invesco Equity.
Diversification Opportunities for Bank of America and Invesco Equity
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Invesco is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Invesco Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Equity And 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 Invesco Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Equity And has no effect on the direction of Bank of America i.e., Bank of America and Invesco Equity go up and down completely randomly.
Pair Corralation between Bank of America and Invesco Equity
Considering the 90-day investment horizon Bank of America is expected to under-perform the Invesco Equity. In addition to that, Bank of America is 2.88 times more volatile than Invesco Equity And. It trades about -0.04 of its total potential returns per unit of risk. Invesco Equity And is currently generating about -0.06 per unit of volatility. If you would invest 1,087 in Invesco Equity And on December 1, 2024 and sell it today you would lose (7.00) from holding Invesco Equity And or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Invesco Equity And
Performance |
| Timeline |
| Bank of America |
| Invesco Equity And |
Bank of America and Invesco Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Invesco Equity
The main advantage of trading using opposite Bank of America and Invesco Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Invesco Equity 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 Invesco Equity will offset losses from the drop in Invesco Equity's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Invesco Equity vs. Ab Bond Inflation | Invesco Equity vs. Tiaa Cref Inflation Linked Bond | Invesco Equity vs. Schwab Treasury Inflation | Invesco Equity vs. Cref Inflation Linked Bond |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |