Correlation Between Bank of America and Aritzia
Can any of the company-specific risk be diversified away by investing in both Bank of America and Aritzia 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 Aritzia 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 Aritzia, you can compare the effects of market volatilities on Bank of America and Aritzia 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 Aritzia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Aritzia.
Diversification Opportunities for Bank of America and Aritzia
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Aritzia is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Aritzia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aritzia 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 Aritzia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aritzia has no effect on the direction of Bank of America i.e., Bank of America and Aritzia go up and down completely randomly.
Pair Corralation between Bank of America and Aritzia
Considering the 90-day investment horizon Bank of America is expected to generate 1.27 times less return on investment than Aritzia. But when comparing it to its historical volatility, Bank of America is 1.91 times less risky than Aritzia. It trades about 0.13 of its potential returns per unit of risk. Aritzia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,632 in Aritzia on August 26, 2024 and sell it today you would earn a total of 1,749 from holding Aritzia or generate 66.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bank of America vs. Aritzia
Performance |
| Timeline |
| Bank of America |
| Aritzia |
Bank of America and Aritzia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Aritzia
The main advantage of trading using opposite Bank of America and Aritzia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Aritzia 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 Aritzia will offset losses from the drop in Aritzia's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Aritzia vs. Canada Goose Holdings | Aritzia vs. Restaurant Brands International | Aritzia vs. Lightspeed Commerce | Aritzia vs. goeasy |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |