Correlation Between Bank of America and Brockhaus Capital
Can any of the company-specific risk be diversified away by investing in both Bank of America and Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital Management, you can compare the effects of market volatilities on Bank of America and Brockhaus Capital 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 Brockhaus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Brockhaus Capital.
Diversification Opportunities for Bank of America and Brockhaus Capital
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Brockhaus is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Brockhaus Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brockhaus Capital 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 Brockhaus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brockhaus Capital has no effect on the direction of Bank of America i.e., Bank of America and Brockhaus Capital go up and down completely randomly.
Pair Corralation between Bank of America and Brockhaus Capital
Considering the 90-day investment horizon Bank of America is expected to generate 0.57 times more return on investment than Brockhaus Capital. However, Bank of America is 1.76 times less risky than Brockhaus Capital. It trades about 0.06 of its potential returns per unit of risk. Brockhaus Capital Management is currently generating about 0.02 per unit of risk. If you would invest 3,223 in Bank of America on August 31, 2024 and sell it today you would earn a total of 1,528 from holding Bank of America or generate 47.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.56% |
| Values | Daily Returns |
Bank of America vs. Brockhaus Capital Management
Performance |
| Timeline |
| Bank of America |
| Brockhaus Capital |
Bank of America and Brockhaus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Brockhaus Capital
The main advantage of trading using opposite Bank of America and Brockhaus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Brockhaus Capital 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 Brockhaus Capital will offset losses from the drop in Brockhaus Capital'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 |
| Brockhaus Capital vs. Ameriprise Financial | Brockhaus Capital vs. Ares Management Corp | Brockhaus Capital vs. Superior Plus Corp | Brockhaus Capital vs. NMI Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |