Correlation Between Bank of America and Addex Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bank of America and Addex Therapeutics 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 Addex Therapeutics 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 Addex Therapeutics, you can compare the effects of market volatilities on Bank of America and Addex Therapeutics 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 Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Addex Therapeutics.
Diversification Opportunities for Bank of America and Addex Therapeutics
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Addex is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics 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 Addex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addex Therapeutics has no effect on the direction of Bank of America i.e., Bank of America and Addex Therapeutics go up and down completely randomly.
Pair Corralation between Bank of America and Addex Therapeutics
Considering the 90-day investment horizon Bank of America is expected to generate 0.33 times more return on investment than Addex Therapeutics. However, Bank of America is 3.0 times less risky than Addex Therapeutics. It trades about 0.27 of its potential returns per unit of risk. Addex Therapeutics is currently generating about -0.25 per unit of risk. If you would invest 4,189 in Bank of America on August 26, 2024 and sell it today you would earn a total of 511.00 from holding Bank of America or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Addex Therapeutics
Performance |
| Timeline |
| Bank of America |
| Addex Therapeutics |
Bank of America and Addex Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Addex Therapeutics
The main advantage of trading using opposite Bank of America and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Addex Therapeutics 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 Addex Therapeutics will offset losses from the drop in Addex Therapeutics' long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Addex Therapeutics vs. Innate Pharma | Addex Therapeutics vs. Aptorum Group Ltd | Addex Therapeutics vs. Dyadic International | Addex Therapeutics vs. Soligenix |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |