Correlation Between Bank of America and YieldMax AMZN
Can any of the company-specific risk be diversified away by investing in both Bank of America and YieldMax AMZN 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 YieldMax AMZN 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 YieldMax AMZN Option, you can compare the effects of market volatilities on Bank of America and YieldMax AMZN 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 YieldMax AMZN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and YieldMax AMZN.
Diversification Opportunities for Bank of America and YieldMax AMZN
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and YieldMax is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and YieldMax AMZN Option in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YieldMax AMZN Option 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 YieldMax AMZN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YieldMax AMZN Option has no effect on the direction of Bank of America i.e., Bank of America and YieldMax AMZN go up and down completely randomly.
Pair Corralation between Bank of America and YieldMax AMZN
Considering the 90-day investment horizon Bank of America is expected to generate 1.04 times more return on investment than YieldMax AMZN. However, Bank of America is 1.04 times more volatile than YieldMax AMZN Option. It trades about 0.11 of its potential returns per unit of risk. YieldMax AMZN Option is currently generating about 0.09 per unit of risk. If you would invest 2,741 in Bank of America on November 28, 2024 and sell it today you would earn a total of 1,687 from holding Bank of America or generate 61.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. YieldMax AMZN Option
Performance |
| Timeline |
| Bank of America |
| YieldMax AMZN Option |
Bank of America and YieldMax AMZN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and YieldMax AMZN
The main advantage of trading using opposite Bank of America and YieldMax AMZN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, YieldMax AMZN 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 YieldMax AMZN will offset losses from the drop in YieldMax AMZN'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 |
| YieldMax AMZN vs. Strategy Shares | YieldMax AMZN vs. Freedom Day Dividend | YieldMax AMZN vs. Franklin Templeton ETF | YieldMax AMZN vs. iShares MSCI China |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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