Correlation Between Bank of America and Accel Entertainment
Can any of the company-specific risk be diversified away by investing in both Bank of America and Accel Entertainment 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 Accel Entertainment 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 Accel Entertainment, you can compare the effects of market volatilities on Bank of America and Accel Entertainment 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 Accel Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Accel Entertainment.
Diversification Opportunities for Bank of America and Accel Entertainment
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Accel is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Accel Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accel Entertainment 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 Accel Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accel Entertainment has no effect on the direction of Bank of America i.e., Bank of America and Accel Entertainment go up and down completely randomly.
Pair Corralation between Bank of America and Accel Entertainment
Considering the 90-day investment horizon Bank of America is expected to generate 0.79 times more return on investment than Accel Entertainment. However, Bank of America is 1.27 times less risky than Accel Entertainment. It trades about 0.06 of its potential returns per unit of risk. Accel Entertainment is currently generating about 0.04 per unit of risk. If you would invest 3,138 in Bank of America on August 27, 2024 and sell it today you would earn a total of 1,562 from holding Bank of America or generate 49.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Accel Entertainment
Performance |
| Timeline |
| Bank of America |
| Accel Entertainment |
Bank of America and Accel Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Accel Entertainment
The main advantage of trading using opposite Bank of America and Accel Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Accel Entertainment 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 Accel Entertainment will offset losses from the drop in Accel Entertainment's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| Accel Entertainment vs. Light Wonder | Accel Entertainment vs. Everi Holdings | Accel Entertainment vs. Inspired Entertainment | Accel Entertainment vs. International Game Technology |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance |