Correlation Between Bank of America and Banque Cantonale
Can any of the company-specific risk be diversified away by investing in both Bank of America and Banque Cantonale 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 Banque Cantonale 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 Banque Cantonale de, you can compare the effects of market volatilities on Bank of America and Banque Cantonale 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 Banque Cantonale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Banque Cantonale.
Diversification Opportunities for Bank of America and Banque Cantonale
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Banque is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Banque Cantonale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque Cantonale 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 Banque Cantonale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque Cantonale has no effect on the direction of Bank of America i.e., Bank of America and Banque Cantonale go up and down completely randomly.
Pair Corralation between Bank of America and Banque Cantonale
Considering the 90-day investment horizon Bank of America is expected to generate 1.2 times less return on investment than Banque Cantonale. In addition to that, Bank of America is 1.25 times more volatile than Banque Cantonale de. It trades about 0.09 of its total potential returns per unit of risk. Banque Cantonale de is currently generating about 0.13 per unit of volatility. If you would invest 25,700 in Banque Cantonale de on November 5, 2024 and sell it today you would earn a total of 700.00 from holding Banque Cantonale de or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bank of America vs. Banque Cantonale de
Performance |
| Timeline |
| Bank of America |
| Banque Cantonale |
Bank of America and Banque Cantonale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Banque Cantonale
The main advantage of trading using opposite Bank of America and Banque Cantonale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Banque Cantonale 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 Banque Cantonale will offset losses from the drop in Banque Cantonale's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Canadian Imperial Bank |
| Banque Cantonale vs. Banque Cantonale | Banque Cantonale vs. Luzerner Kantonalbank AG | Banque Cantonale vs. Berner Kantonalbank AG | Banque Cantonale vs. Basler Kantonalbank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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