Correlation Between Bank of America and AltShares Trust
Can any of the company-specific risk be diversified away by investing in both Bank of America and AltShares Trust 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 AltShares Trust 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 AltShares Trust , you can compare the effects of market volatilities on Bank of America and AltShares Trust 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 AltShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and AltShares Trust.
Diversification Opportunities for Bank of America and AltShares Trust
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and AltShares is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and AltShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Trust 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 AltShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Trust has no effect on the direction of Bank of America i.e., Bank of America and AltShares Trust go up and down completely randomly.
Pair Corralation between Bank of America and AltShares Trust
Considering the 90-day investment horizon Bank of America is expected to generate 5.84 times more return on investment than AltShares Trust. However, Bank of America is 5.84 times more volatile than AltShares Trust . It trades about 0.05 of its potential returns per unit of risk. AltShares Trust is currently generating about 0.07 per unit of risk. If you would invest 3,397 in Bank of America on September 1, 2024 and sell it today you would earn a total of 1,354 from holding Bank of America or generate 39.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Bank of America vs. AltShares Trust
Performance |
| Timeline |
| Bank of America |
| AltShares Trust |
Bank of America and AltShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and AltShares Trust
The main advantage of trading using opposite Bank of America and AltShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, AltShares Trust 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 AltShares Trust will offset losses from the drop in AltShares Trust's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| AltShares Trust vs. Albany International | AltShares Trust vs. Acadia Realty Trust | AltShares Trust vs. AptarGroup | AltShares Trust vs. Applied Industrial Technologies |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |