Correlation Between Bank of America and Alkame Holdings
Can any of the company-specific risk be diversified away by investing in both Bank of America and Alkame Holdings 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 Alkame Holdings 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 Alkame Holdings, you can compare the effects of market volatilities on Bank of America and Alkame Holdings 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 Alkame Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Alkame Holdings.
Diversification Opportunities for Bank of America and Alkame Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Alkame is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Alkame Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkame Holdings 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 Alkame Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkame Holdings has no effect on the direction of Bank of America i.e., Bank of America and Alkame Holdings go up and down completely randomly.
Pair Corralation between Bank of America and Alkame Holdings
Considering the 90-day investment horizon Bank of America is expected to generate 8.2 times less return on investment than Alkame Holdings. But when comparing it to its historical volatility, Bank of America is 11.25 times less risky than Alkame Holdings. It trades about 0.09 of its potential returns per unit of risk. Alkame Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Alkame Holdings on September 12, 2024 and sell it today you would lose (0.01) from holding Alkame Holdings or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Alkame Holdings
Performance |
| Timeline |
| Bank of America |
| Alkame Holdings |
Bank of America and Alkame Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Alkame Holdings
The main advantage of trading using opposite Bank of America and Alkame Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Alkame Holdings 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 Alkame Holdings will offset losses from the drop in Alkame Holdings' long position.| Bank of America vs. JPMorgan Chase Co | Bank of America vs. Victory Integrity Smallmid Cap | Bank of America vs. Hilton Worldwide Holdings | Bank of America vs. NVIDIA |
| Alkame Holdings vs. V Group | Alkame Holdings vs. Fbec Worldwide | Alkame Holdings vs. Hiru Corporation | Alkame Holdings vs. Bank of America |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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