Correlation Between Bank of America and Applied Minerals
Can any of the company-specific risk be diversified away by investing in both Bank of America and Applied Minerals 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 Applied Minerals 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 Applied Minerals, you can compare the effects of market volatilities on Bank of America and Applied Minerals 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 Applied Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Applied Minerals.
Diversification Opportunities for Bank of America and Applied Minerals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Applied is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Applied Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Minerals 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 Applied Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Minerals has no effect on the direction of Bank of America i.e., Bank of America and Applied Minerals go up and down completely randomly.
Pair Corralation between Bank of America and Applied Minerals
If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank of America vs. Applied Minerals
Performance |
| Timeline |
| Bank of America |
| Applied Minerals |
Bank of America and Applied Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Applied Minerals
The main advantage of trading using opposite Bank of America and Applied Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Applied Minerals 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 Applied Minerals will offset losses from the drop in Applied Minerals' long position.| Bank of America vs. Citigroup | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| Applied Minerals vs. Granite Creek Copper | Applied Minerals vs. South Star Battery | Applied Minerals vs. Bayhorse Silver | Applied Minerals vs. Golden Lake Exploration |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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