Correlation Between Bank of America and Alimentation Couchen
Can any of the company-specific risk be diversified away by investing in both Bank of America and Alimentation Couchen 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 Alimentation Couchen 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 Alimentation Couchen Tard, you can compare the effects of market volatilities on Bank of America and Alimentation Couchen 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 Alimentation Couchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Alimentation Couchen.
Diversification Opportunities for Bank of America and Alimentation Couchen
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Alimentation is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Alimentation Couchen Tard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimentation Couchen Tard 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 Alimentation Couchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimentation Couchen Tard has no effect on the direction of Bank of America i.e., Bank of America and Alimentation Couchen go up and down completely randomly.
Pair Corralation between Bank of America and Alimentation Couchen
Considering the 90-day investment horizon Bank of America is expected to generate 1.12 times more return on investment than Alimentation Couchen. However, Bank of America is 1.12 times more volatile than Alimentation Couchen Tard. It trades about 0.17 of its potential returns per unit of risk. Alimentation Couchen Tard is currently generating about 0.08 per unit of risk. If you would invest 4,044 in Bank of America on August 31, 2024 and sell it today you would earn a total of 733.00 from holding Bank of America or generate 18.13% 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. Alimentation Couchen Tard
Performance |
| Timeline |
| Bank of America |
| Alimentation Couchen Tard |
Bank of America and Alimentation Couchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Alimentation Couchen
The main advantage of trading using opposite Bank of America and Alimentation Couchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Alimentation Couchen 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 Alimentation Couchen will offset losses from the drop in Alimentation Couchen's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Arko Corp | Alimentation Couchen vs. Sportsmans | Alimentation Couchen vs. Murphy USA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |