Correlation Between Bank of America and AYR Strategies
Can any of the company-specific risk be diversified away by investing in both Bank of America and AYR Strategies 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 AYR Strategies 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 AYR Strategies Class, you can compare the effects of market volatilities on Bank of America and AYR Strategies 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 AYR Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and AYR Strategies.
Diversification Opportunities for Bank of America and AYR Strategies
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and AYR is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and AYR Strategies Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYR Strategies Class 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 AYR Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYR Strategies Class has no effect on the direction of Bank of America i.e., Bank of America and AYR Strategies go up and down completely randomly.
Pair Corralation between Bank of America and AYR Strategies
Considering the 90-day investment horizon Bank of America is expected to generate 0.16 times more return on investment than AYR Strategies. However, Bank of America is 6.18 times less risky than AYR Strategies. It trades about 0.26 of its potential returns per unit of risk. AYR Strategies Class is currently generating about -0.13 per unit of risk. If you would invest 3,940 in Bank of America on August 28, 2024 and sell it today you would earn a total of 810.00 from holding Bank of America or generate 20.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. AYR Strategies Class
Performance |
| Timeline |
| Bank of America |
| AYR Strategies Class |
Bank of America and AYR Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and AYR Strategies
The main advantage of trading using opposite Bank of America and AYR Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, AYR Strategies 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 AYR Strategies will offset losses from the drop in AYR Strategies' long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| AYR Strategies vs. Green Thumb Industries | AYR Strategies vs. Trulieve Cannabis Corp | AYR Strategies vs. Goodness Growth Holdings | AYR Strategies vs. Verano Holdings 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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