Correlation Between Bank of America and Asia Pptys
Can any of the company-specific risk be diversified away by investing in both Bank of America and Asia Pptys 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 Asia Pptys 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 Asia Pptys, you can compare the effects of market volatilities on Bank of America and Asia Pptys 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 Asia Pptys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Asia Pptys.
Diversification Opportunities for Bank of America and Asia Pptys
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Asia is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Asia Pptys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pptys 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 Asia Pptys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pptys has no effect on the direction of Bank of America i.e., Bank of America and Asia Pptys go up and down completely randomly.
Pair Corralation between Bank of America and Asia Pptys
Considering the 90-day investment horizon Bank of America is expected to generate 9.28 times less return on investment than Asia Pptys. But when comparing it to its historical volatility, Bank of America is 34.32 times less risky than Asia Pptys. It trades about 0.05 of its potential returns per unit of risk. Asia Pptys is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3.29 in Asia Pptys on November 18, 2024 and sell it today you would lose (1.97) from holding Asia Pptys or give up 59.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Asia Pptys
Performance |
| Timeline |
| Bank of America |
| Asia Pptys |
Bank of America and Asia Pptys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Asia Pptys
The main advantage of trading using opposite Bank of America and Asia Pptys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Asia Pptys 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 Asia Pptys will offset losses from the drop in Asia Pptys' 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 |
| Asia Pptys vs. Aztec Land Comb | Asia Pptys vs. Ambase Corp | Asia Pptys vs. Agritek Holdings | Asia Pptys vs. Aroundtown SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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