Correlation Between Bank of America and Advance United
Can any of the company-specific risk be diversified away by investing in both Bank of America and Advance United 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 Advance United 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 Advance United Holdings, you can compare the effects of market volatilities on Bank of America and Advance United 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 Advance United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Advance United.
Diversification Opportunities for Bank of America and Advance United
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Advance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Advance United Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance United Holdings 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 Advance United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance United Holdings has no effect on the direction of Bank of America i.e., Bank of America and Advance United go up and down completely randomly.
Pair Corralation between Bank of America and Advance United
If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Advance United Holdings
Performance |
| Timeline |
| Bank of America |
| Advance United Holdings |
Bank of America and Advance United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Advance United
The main advantage of trading using opposite Bank of America and Advance United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Advance United 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 Advance United will offset losses from the drop in Advance United'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 |
| Advance United vs. Aurion Resources | Advance United vs. Rio2 Limited | Advance United vs. Palamina Corp | Advance United vs. BTU Metals Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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