Correlation Between Bank of America and Alumex PLC
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By analyzing existing cross correlation between Bank of America and Alumex PLC, you can compare the effects of market volatilities on Bank of America and Alumex PLC 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 Alumex PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Alumex PLC.
Diversification Opportunities for Bank of America and Alumex PLC
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Alumex is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Alumex PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumex PLC 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 Alumex PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumex PLC has no effect on the direction of Bank of America i.e., Bank of America and Alumex PLC go up and down completely randomly.
Pair Corralation between Bank of America and Alumex PLC
Considering the 90-day investment horizon Bank of America is expected to under-perform the Alumex PLC. But the stock apears to be less risky and, when comparing its historical volatility, Bank of America is 2.4 times less risky than Alumex PLC. The stock trades about -0.34 of its potential returns per unit of risk. The Alumex PLC is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,590 in Alumex PLC on November 28, 2024 and sell it today you would lose (40.00) from holding Alumex PLC or give up 2.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. Alumex PLC
Performance |
| Timeline |
| Bank of America |
| Alumex PLC |
Bank of America and Alumex PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Alumex PLC
The main advantage of trading using opposite Bank of America and Alumex PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Alumex PLC 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 Alumex PLC will offset losses from the drop in Alumex PLC'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. Royal Bank of |
| Alumex PLC vs. Union Bank | Alumex PLC vs. National Development Bank | Alumex PLC vs. Hatton National Bank | Alumex PLC vs. COMMERCIAL BANK OF |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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