Correlation Between Bank of America and Benguet Corp
Can any of the company-specific risk be diversified away by investing in both Bank of America and Benguet Corp 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 Benguet Corp 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 Benguet Corp A, you can compare the effects of market volatilities on Bank of America and Benguet Corp 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 Benguet Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Benguet Corp.
Diversification Opportunities for Bank of America and Benguet Corp
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Benguet is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Benguet Corp A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benguet Corp A 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 Benguet Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benguet Corp A has no effect on the direction of Bank of America i.e., Bank of America and Benguet Corp go up and down completely randomly.
Pair Corralation between Bank of America and Benguet Corp
Considering the 90-day investment horizon Bank of America is expected to generate 0.57 times more return on investment than Benguet Corp. However, Bank of America is 1.76 times less risky than Benguet Corp. It trades about 0.06 of its potential returns per unit of risk. Benguet Corp A is currently generating about 0.01 per unit of risk. If you would invest 3,085 in Bank of America on August 29, 2024 and sell it today you would earn a total of 1,690 from holding Bank of America or generate 54.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.66% |
| Values | Daily Returns |
Bank of America vs. Benguet Corp A
Performance |
| Timeline |
| Bank of America |
| Benguet Corp A |
Bank of America and Benguet Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Benguet Corp
The main advantage of trading using opposite Bank of America and Benguet Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Benguet Corp 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 Benguet Corp will offset losses from the drop in Benguet Corp's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Benguet Corp vs. Bank of the | Benguet Corp vs. Philex Mining Corp | Benguet Corp vs. Robinsons Retail Holdings | Benguet Corp vs. Philippine Business Bank |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |