Correlation Between Bank of America and Bird Construction
Can any of the company-specific risk be diversified away by investing in both Bank of America and Bird Construction 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 Bird Construction 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 Bird Construction, you can compare the effects of market volatilities on Bank of America and Bird Construction 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 Bird Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Bird Construction.
Diversification Opportunities for Bank of America and Bird Construction
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Bird is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Bird Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bird Construction 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 Bird Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bird Construction has no effect on the direction of Bank of America i.e., Bank of America and Bird Construction go up and down completely randomly.
Pair Corralation between Bank of America and Bird Construction
Considering the 90-day investment horizon Bank of America is expected to generate 3.49 times less return on investment than Bird Construction. But when comparing it to its historical volatility, Bank of America is 1.9 times less risky than Bird Construction. It trades about 0.06 of its potential returns per unit of risk. Bird Construction is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 536.00 in Bird Construction on August 30, 2024 and sell it today you would earn a total of 1,632 from holding Bird Construction or generate 304.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.73% |
| Values | Daily Returns |
Bank of America vs. Bird Construction
Performance |
| Timeline |
| Bank of America |
| Bird Construction |
Bank of America and Bird Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Bird Construction
The main advantage of trading using opposite Bank of America and Bird Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Bird Construction 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 Bird Construction will offset losses from the drop in Bird Construction's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| Bird Construction vs. MYR Group | Bird Construction vs. Limbach Holdings | Bird Construction vs. Bowman Consulting Group | Bird Construction vs. Matrix Service Co |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |