Correlation Between Bank of America and Ninepoint Bitcoin
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ninepoint Bitcoin 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 Ninepoint Bitcoin 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 Ninepoint Bitcoin ETF, you can compare the effects of market volatilities on Bank of America and Ninepoint Bitcoin 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 Ninepoint Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ninepoint Bitcoin.
Diversification Opportunities for Bank of America and Ninepoint Bitcoin
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Ninepoint is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ninepoint Bitcoin ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ninepoint Bitcoin ETF 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 Ninepoint Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ninepoint Bitcoin ETF has no effect on the direction of Bank of America i.e., Bank of America and Ninepoint Bitcoin go up and down completely randomly.
Pair Corralation between Bank of America and Ninepoint Bitcoin
Considering the 90-day investment horizon Bank of America is expected to generate 2.97 times less return on investment than Ninepoint Bitcoin. But when comparing it to its historical volatility, Bank of America is 1.61 times less risky than Ninepoint Bitcoin. It trades about 0.06 of its potential returns per unit of risk. Ninepoint Bitcoin ETF is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 694.00 in Ninepoint Bitcoin ETF on September 2, 2024 and sell it today you would earn a total of 1,799 from holding Ninepoint Bitcoin ETF or generate 259.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Bank of America vs. Ninepoint Bitcoin ETF
Performance |
| Timeline |
| Bank of America |
| Ninepoint Bitcoin ETF |
Bank of America and Ninepoint Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ninepoint Bitcoin
The main advantage of trading using opposite Bank of America and Ninepoint Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ninepoint Bitcoin 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 Ninepoint Bitcoin will offset losses from the drop in Ninepoint Bitcoin's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Ninepoint Bitcoin vs. Ninepoint Bitcoin ETF | Ninepoint Bitcoin vs. Ninepoint Energy | Ninepoint Bitcoin vs. Ninepoint Web3 Innovators | Ninepoint Bitcoin vs. Ninepoint Energy Income |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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