Correlation Between Bank of America and Annovis Bio
Can any of the company-specific risk be diversified away by investing in both Bank of America and Annovis Bio 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 Annovis Bio 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 Annovis Bio, you can compare the effects of market volatilities on Bank of America and Annovis Bio 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 Annovis Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Annovis Bio.
Diversification Opportunities for Bank of America and Annovis Bio
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Annovis is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Annovis Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annovis Bio 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 Annovis Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annovis Bio has no effect on the direction of Bank of America i.e., Bank of America and Annovis Bio go up and down completely randomly.
Pair Corralation between Bank of America and Annovis Bio
Considering the 90-day investment horizon Bank of America is expected to generate 2.09 times less return on investment than Annovis Bio. But when comparing it to its historical volatility, Bank of America is 7.17 times less risky than Annovis Bio. It trades about 0.12 of its potential returns per unit of risk. Annovis Bio is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 910.00 in Annovis Bio on August 29, 2024 and sell it today you would lose (256.00) from holding Annovis Bio or give up 28.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Annovis Bio
Performance |
| Timeline |
| Bank of America |
| Annovis Bio |
Bank of America and Annovis Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Annovis Bio
The main advantage of trading using opposite Bank of America and Annovis Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Annovis Bio 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 Annovis Bio will offset losses from the drop in Annovis Bio'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. JPMorgan Chase Co |
| Annovis Bio vs. Bright Minds Biosciences | Annovis Bio vs. HP Inc | Annovis Bio vs. Intel | Annovis Bio vs. Chevron Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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