Correlation Between Bank of America and Bewhere Holdings
Can any of the company-specific risk be diversified away by investing in both Bank of America and Bewhere Holdings 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 Bewhere Holdings 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 Bewhere Holdings, you can compare the effects of market volatilities on Bank of America and Bewhere Holdings 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 Bewhere Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Bewhere Holdings.
Diversification Opportunities for Bank of America and Bewhere Holdings
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Bewhere is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Bewhere Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bewhere 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 Bewhere Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bewhere Holdings has no effect on the direction of Bank of America i.e., Bank of America and Bewhere Holdings go up and down completely randomly.
Pair Corralation between Bank of America and Bewhere Holdings
Considering the 90-day investment horizon Bank of America is expected to generate 3.37 times less return on investment than Bewhere Holdings. But when comparing it to its historical volatility, Bank of America is 2.53 times less risky than Bewhere Holdings. It trades about 0.06 of its potential returns per unit of risk. Bewhere Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Bewhere Holdings on November 9, 2024 and sell it today you would earn a total of 46.00 from holding Bewhere Holdings or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bank of America vs. Bewhere Holdings
Performance |
| Timeline |
| Bank of America |
| Bewhere Holdings |
Bank of America and Bewhere Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Bewhere Holdings
The main advantage of trading using opposite Bank of America and Bewhere Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Bewhere Holdings 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 Bewhere Holdings will offset losses from the drop in Bewhere Holdings' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Bewhere Holdings vs. Gatekeeper Systems | Bewhere Holdings vs. Reliq Health Technologies | Bewhere Holdings vs. AirIQ Inc | Bewhere Holdings vs. AnalytixInsight |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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