Correlation Between Bank of America and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Bank of America and Antofagasta PLC 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 Antofagasta PLC 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 Antofagasta PLC, you can compare the effects of market volatilities on Bank of America and Antofagasta 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Antofagasta PLC.
Diversification Opportunities for Bank of America and Antofagasta PLC
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Antofagasta is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Bank of America i.e., Bank of America and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Bank of America and Antofagasta PLC
Considering the 90-day investment horizon Bank of America is expected to generate 0.52 times more return on investment than Antofagasta PLC. However, Bank of America is 1.92 times less risky than Antofagasta PLC. It trades about 0.1 of its potential returns per unit of risk. Antofagasta PLC is currently generating about -0.07 per unit of risk. If you would invest 3,883 in Bank of America on August 25, 2024 and sell it today you would earn a total of 817.00 from holding Bank of America or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank of America vs. Antofagasta PLC
Performance |
| Timeline |
| Bank of America |
| Antofagasta PLC |
Bank of America and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Antofagasta PLC
The main advantage of trading using opposite Bank of America and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Antofagasta 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Antofagasta PLC vs. Bell Copper | Antofagasta PLC vs. Arizona Sonoran Copper | Antofagasta PLC vs. Dor Copper Mining | Antofagasta PLC vs. CopperCorp Resources |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |