Correlation Between Bank of America and Bangkok Chain
Can any of the company-specific risk be diversified away by investing in both Bank of America and Bangkok Chain 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 Bangkok Chain 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 Bangkok Chain Hospital, you can compare the effects of market volatilities on Bank of America and Bangkok Chain 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 Bangkok Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Bangkok Chain.
Diversification Opportunities for Bank of America and Bangkok Chain
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Bangkok is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Bangkok Chain Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Chain Hospital 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 Bangkok Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Chain Hospital has no effect on the direction of Bank of America i.e., Bank of America and Bangkok Chain go up and down completely randomly.
Pair Corralation between Bank of America and Bangkok Chain
Considering the 90-day investment horizon Bank of America is expected to generate 1.03 times more return on investment than Bangkok Chain. However, Bank of America is 1.03 times more volatile than Bangkok Chain Hospital. It trades about 0.1 of its potential returns per unit of risk. Bangkok Chain Hospital is currently generating about -0.01 per unit of risk. If you would invest 2,820 in Bank of America on August 31, 2024 and sell it today you would earn a total of 1,931 from holding Bank of America or generate 68.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.33% |
| Values | Daily Returns |
Bank of America vs. Bangkok Chain Hospital
Performance |
| Timeline |
| Bank of America |
| Bangkok Chain Hospital |
Bank of America and Bangkok Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Bangkok Chain
The main advantage of trading using opposite Bank of America and Bangkok Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Bangkok Chain 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 Bangkok Chain will offset losses from the drop in Bangkok Chain's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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