Correlation Between Bank of America and Alpha Esports
Can any of the company-specific risk be diversified away by investing in both Bank of America and Alpha Esports 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 Alpha Esports 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 Alpha Esports Tech, you can compare the effects of market volatilities on Bank of America and Alpha Esports 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 Alpha Esports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Alpha Esports.
Diversification Opportunities for Bank of America and Alpha Esports
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Alpha is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Alpha Esports Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Esports Tech 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 Alpha Esports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Esports Tech has no effect on the direction of Bank of America i.e., Bank of America and Alpha Esports go up and down completely randomly.
Pair Corralation between Bank of America and Alpha Esports
Considering the 90-day investment horizon Bank of America is expected to under-perform the Alpha Esports. But the stock apears to be less risky and, when comparing its historical volatility, Bank of America is 7.22 times less risky than Alpha Esports. The stock trades about -0.16 of its potential returns per unit of risk. The Alpha Esports Tech is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Alpha Esports Tech on January 9, 2025 and sell it today you would lose (11.00) from holding Alpha Esports Tech or give up 37.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Alpha Esports Tech
Performance |
| Timeline |
| Bank of America |
| Alpha Esports Tech |
Bank of America and Alpha Esports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Alpha Esports
The main advantage of trading using opposite Bank of America and Alpha Esports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Alpha Esports 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 Alpha Esports will offset losses from the drop in Alpha Esports' 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 |
| Alpha Esports vs. NetEase | Alpha Esports vs. Nintendo Co | Alpha Esports vs. Nintendo Co ADR | Alpha Esports vs. Roblox 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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