Correlation Between Bank of America and Biofrontera Warrants
Can any of the company-specific risk be diversified away by investing in both Bank of America and Biofrontera Warrants 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 Biofrontera Warrants 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 Biofrontera Warrants, you can compare the effects of market volatilities on Bank of America and Biofrontera Warrants 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 Biofrontera Warrants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Biofrontera Warrants.
Diversification Opportunities for Bank of America and Biofrontera Warrants
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Biofrontera is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Biofrontera Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biofrontera Warrants 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 Biofrontera Warrants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biofrontera Warrants has no effect on the direction of Bank of America i.e., Bank of America and Biofrontera Warrants go up and down completely randomly.
Pair Corralation between Bank of America and Biofrontera Warrants
Considering the 90-day investment horizon Bank of America is expected to generate 38.7 times less return on investment than Biofrontera Warrants. But when comparing it to its historical volatility, Bank of America is 45.95 times less risky than Biofrontera Warrants. It trades about 0.27 of its potential returns per unit of risk. Biofrontera Warrants is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3.90 in Biofrontera Warrants on August 29, 2024 and sell it today you would earn a total of 4.64 from holding Biofrontera Warrants or generate 118.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. Biofrontera Warrants
Performance |
| Timeline |
| Bank of America |
| Biofrontera Warrants |
Bank of America and Biofrontera Warrants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Biofrontera Warrants
The main advantage of trading using opposite Bank of America and Biofrontera Warrants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Biofrontera Warrants 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 Biofrontera Warrants will offset losses from the drop in Biofrontera Warrants' long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Biofrontera Warrants vs. Biofrontera | Biofrontera Warrants vs. Pasithea Therapeutics Corp | Biofrontera Warrants vs. Inspira Technologies Oxy | Biofrontera Warrants vs. Bluejay Diagnostics |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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