Correlation Between Bank of America and Atelierele CFR
Can any of the company-specific risk be diversified away by investing in both Bank of America and Atelierele CFR 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 Atelierele CFR 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 Atelierele CFR Grivita, you can compare the effects of market volatilities on Bank of America and Atelierele CFR 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 Atelierele CFR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Atelierele CFR.
Diversification Opportunities for Bank of America and Atelierele CFR
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Atelierele is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Atelierele CFR Grivita in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atelierele CFR Grivita 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 Atelierele CFR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atelierele CFR Grivita has no effect on the direction of Bank of America i.e., Bank of America and Atelierele CFR go up and down completely randomly.
Pair Corralation between Bank of America and Atelierele CFR
Considering the 90-day investment horizon Bank of America is expected to generate 2.89 times less return on investment than Atelierele CFR. But when comparing it to its historical volatility, Bank of America is 2.54 times less risky than Atelierele CFR. It trades about 0.06 of its potential returns per unit of risk. Atelierele CFR Grivita is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Atelierele CFR Grivita on August 29, 2024 and sell it today you would earn a total of 2,650 from holding Atelierele CFR Grivita or generate 106.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.55% |
| Values | Daily Returns |
Bank of America vs. Atelierele CFR Grivita
Performance |
| Timeline |
| Bank of America |
| Atelierele CFR Grivita |
Bank of America and Atelierele CFR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Atelierele CFR
The main advantage of trading using opposite Bank of America and Atelierele CFR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Atelierele CFR 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 Atelierele CFR will offset losses from the drop in Atelierele CFR'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 |
| Atelierele CFR vs. Teraplast Bist | Atelierele CFR vs. Electroarges S | Atelierele CFR vs. Comvex SA | Atelierele CFR vs. IAR 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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