Correlation Between Bank of America and Allianzgi Diversified
Can any of the company-specific risk be diversified away by investing in both Bank of America and Allianzgi Diversified 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 Allianzgi Diversified 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 Allianzgi Diversified Income, you can compare the effects of market volatilities on Bank of America and Allianzgi Diversified 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 Allianzgi Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Allianzgi Diversified.
Diversification Opportunities for Bank of America and Allianzgi Diversified
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Allianzgi is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Allianzgi Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Diversified 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 Allianzgi Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Diversified has no effect on the direction of Bank of America i.e., Bank of America and Allianzgi Diversified go up and down completely randomly.
Pair Corralation between Bank of America and Allianzgi Diversified
Considering the 90-day investment horizon Bank of America is expected to under-perform the Allianzgi Diversified. In addition to that, Bank of America is 1.34 times more volatile than Allianzgi Diversified Income. It trades about -0.12 of its total potential returns per unit of risk. Allianzgi Diversified Income is currently generating about -0.09 per unit of volatility. If you would invest 2,128 in Allianzgi Diversified Income on January 14, 2025 and sell it today you would lose (223.00) from holding Allianzgi Diversified Income or give up 10.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Allianzgi Diversified Income
Performance |
| Timeline |
| Bank of America |
| Allianzgi Diversified |
Bank of America and Allianzgi Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Allianzgi Diversified
The main advantage of trading using opposite Bank of America and Allianzgi Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Allianzgi Diversified 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 Allianzgi Diversified will offset losses from the drop in Allianzgi Diversified's long position.| Bank of America vs. Stellar Bancorp, | Bank of America vs. Greenidge Generation Holdings | Bank of America vs. Griffon | Bank of America vs. First Trustconfluence Small |
| Allianzgi Diversified vs. Brookfield Business Corp | Allianzgi Diversified vs. Elysee Development Corp | Allianzgi Diversified vs. DWS Municipal Income | Allianzgi Diversified vs. Blackrock Munivest |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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