Correlation Between Bank of America and Biomm SA
Can any of the company-specific risk be diversified away by investing in both Bank of America and Biomm SA 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 Biomm SA 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 Biomm SA, you can compare the effects of market volatilities on Bank of America and Biomm SA 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 Biomm SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Biomm SA.
Diversification Opportunities for Bank of America and Biomm SA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Biomm is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Biomm SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomm SA 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 Biomm SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomm SA has no effect on the direction of Bank of America i.e., Bank of America and Biomm SA go up and down completely randomly.
Pair Corralation between Bank of America and Biomm SA
Considering the 90-day investment horizon Bank of America is expected to generate 1.37 times less return on investment than Biomm SA. But when comparing it to its historical volatility, Bank of America is 3.45 times less risky than Biomm SA. It trades about 0.1 of its potential returns per unit of risk. Biomm SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 584.00 in Biomm SA on August 31, 2024 and sell it today you would earn a total of 215.00 from holding Biomm SA or generate 36.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Bank of America vs. Biomm SA
Performance |
| Timeline |
| Bank of America |
| Biomm SA |
Bank of America and Biomm SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Biomm SA
The main advantage of trading using opposite Bank of America and Biomm SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Biomm SA 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 Biomm SA will offset losses from the drop in Biomm SA'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 |
| Biomm SA vs. Profarma Distribuidora de | Biomm SA vs. Ouro Fino Sade | Biomm SA vs. Centro de Imagem | Biomm SA vs. Bahema Educao SA |
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
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |