Correlation Between Bank of America and African Gold
Can any of the company-specific risk be diversified away by investing in both Bank of America and African Gold 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 African Gold 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 African Gold Acquisition, you can compare the effects of market volatilities on Bank of America and African Gold 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 African Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and African Gold.
Diversification Opportunities for Bank of America and African Gold
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and African is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and African Gold Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Gold Acquisition 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 African Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Gold Acquisition has no effect on the direction of Bank of America i.e., Bank of America and African Gold go up and down completely randomly.
Pair Corralation between Bank of America and African Gold
If you would invest 4,176 in Bank of America on September 2, 2024 and sell it today you would earn a total of 575.00 from holding Bank of America or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Bank of America vs. African Gold Acquisition
Performance |
| Timeline |
| Bank of America |
| African Gold Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and African Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and African Gold
The main advantage of trading using opposite Bank of America and African Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, African Gold 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 African Gold will offset losses from the drop in African Gold's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |