Correlation Between Bank of America and Aluar Aluminio
Can any of the company-specific risk be diversified away by investing in both Bank of America and Aluar Aluminio 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 Aluar Aluminio 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 Aluar Aluminio Argentino, you can compare the effects of market volatilities on Bank of America and Aluar Aluminio 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 Aluar Aluminio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Aluar Aluminio.
Diversification Opportunities for Bank of America and Aluar Aluminio
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Aluar is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Aluar Aluminio Argentino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluar Aluminio Argentino 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 Aluar Aluminio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluar Aluminio Argentino has no effect on the direction of Bank of America i.e., Bank of America and Aluar Aluminio go up and down completely randomly.
Pair Corralation between Bank of America and Aluar Aluminio
Considering the 90-day investment horizon Bank of America is expected to generate 4.22 times less return on investment than Aluar Aluminio. But when comparing it to its historical volatility, Bank of America is 2.48 times less risky than Aluar Aluminio. It trades about 0.06 of its potential returns per unit of risk. Aluar Aluminio Argentino is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 17,379 in Aluar Aluminio Argentino on August 30, 2024 and sell it today you would earn a total of 76,621 from holding Aluar Aluminio Argentino or generate 440.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Bank of America vs. Aluar Aluminio Argentino
Performance |
| Timeline |
| Bank of America |
| Aluar Aluminio Argentino |
Bank of America and Aluar Aluminio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Aluar Aluminio
The main advantage of trading using opposite Bank of America and Aluar Aluminio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Aluar Aluminio 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 Aluar Aluminio will offset losses from the drop in Aluar Aluminio's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| Aluar Aluminio vs. Telecom Argentina | Aluar Aluminio vs. Compania de Transporte | Aluar Aluminio vs. Agrometal SAI | Aluar Aluminio vs. Harmony Gold Mining |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |