Correlation Between Bank of America and Invibes Advertising
Can any of the company-specific risk be diversified away by investing in both Bank of America and Invibes Advertising 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 Invibes Advertising 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 Invibes Advertising NV, you can compare the effects of market volatilities on Bank of America and Invibes Advertising 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 Invibes Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Invibes Advertising.
Diversification Opportunities for Bank of America and Invibes Advertising
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Invibes is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Invibes Advertising NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invibes Advertising 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 Invibes Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invibes Advertising has no effect on the direction of Bank of America i.e., Bank of America and Invibes Advertising go up and down completely randomly.
Pair Corralation between Bank of America and Invibes Advertising
Considering the 90-day investment horizon Bank of America is expected to generate 0.4 times more return on investment than Invibes Advertising. However, Bank of America is 2.52 times less risky than Invibes Advertising. It trades about 0.06 of its potential returns per unit of risk. Invibes Advertising NV is currently generating about -0.03 per unit of risk. If you would invest 3,247 in Bank of America on August 26, 2024 and sell it today you would earn a total of 1,453 from holding Bank of America or generate 44.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.35% |
| Values | Daily Returns |
Bank of America vs. Invibes Advertising NV
Performance |
| Timeline |
| Bank of America |
| Invibes Advertising |
Bank of America and Invibes Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Invibes Advertising
The main advantage of trading using opposite Bank of America and Invibes Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Invibes Advertising 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 Invibes Advertising will offset losses from the drop in Invibes Advertising's 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 |
| Invibes Advertising vs. Streamwide | Invibes Advertising vs. Claranova SE | Invibes Advertising vs. SA Catana Group | Invibes Advertising vs. Wallix Group SA |
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.
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