Correlation Between Bank of America and Ashot Ashkelon
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ashot Ashkelon 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 Ashot Ashkelon 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 Ashot Ashkelon Industries, you can compare the effects of market volatilities on Bank of America and Ashot Ashkelon 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 Ashot Ashkelon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ashot Ashkelon.
Diversification Opportunities for Bank of America and Ashot Ashkelon
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Ashot is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ashot Ashkelon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashot Ashkelon Industries 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 Ashot Ashkelon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashot Ashkelon Industries has no effect on the direction of Bank of America i.e., Bank of America and Ashot Ashkelon go up and down completely randomly.
Pair Corralation between Bank of America and Ashot Ashkelon
Considering the 90-day investment horizon Bank of America is expected to generate 0.55 times more return on investment than Ashot Ashkelon. However, Bank of America is 1.83 times less risky than Ashot Ashkelon. It trades about 0.35 of its potential returns per unit of risk. Ashot Ashkelon Industries is currently generating about -0.16 per unit of risk. If you would invest 4,133 in Bank of America on September 3, 2024 and sell it today you would earn a total of 618.00 from holding Bank of America or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Bank of America vs. Ashot Ashkelon Industries
Performance |
| Timeline |
| Bank of America |
| Ashot Ashkelon Industries |
Bank of America and Ashot Ashkelon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ashot Ashkelon
The main advantage of trading using opposite Bank of America and Ashot Ashkelon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ashot Ashkelon 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 Ashot Ashkelon will offset losses from the drop in Ashot Ashkelon's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| Ashot Ashkelon vs. EN Shoham Business | Ashot Ashkelon vs. Accel Solutions Group | Ashot Ashkelon vs. Mivtach Shamir | Ashot Ashkelon vs. Rani Zim Shopping |
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.
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