Correlation Between Bank of America and Bangkok Life
Can any of the company-specific risk be diversified away by investing in both Bank of America and Bangkok Life 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 Bangkok Life 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 Bangkok Life Assurance, you can compare the effects of market volatilities on Bank of America and Bangkok Life 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 Bangkok Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Bangkok Life.
Diversification Opportunities for Bank of America and Bangkok Life
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Bangkok is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Bangkok Life Assurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Life Assurance 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 Bangkok Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Life Assurance has no effect on the direction of Bank of America i.e., Bank of America and Bangkok Life go up and down completely randomly.
Pair Corralation between Bank of America and Bangkok Life
Considering the 90-day investment horizon Bank of America is expected to generate 0.73 times more return on investment than Bangkok Life. However, Bank of America is 1.37 times less risky than Bangkok Life. It trades about 0.06 of its potential returns per unit of risk. Bangkok Life Assurance is currently generating about -0.02 per unit of risk. If you would invest 3,085 in Bank of America on August 29, 2024 and sell it today you would earn a total of 1,692 from holding Bank of America or generate 54.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.18% |
| Values | Daily Returns |
Bank of America vs. Bangkok Life Assurance
Performance |
| Timeline |
| Bank of America |
| Bangkok Life Assurance |
Bank of America and Bangkok Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Bangkok Life
The main advantage of trading using opposite Bank of America and Bangkok Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Bangkok Life 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 Bangkok Life will offset losses from the drop in Bangkok Life's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| Bangkok Life vs. Karmarts Public | Bangkok Life vs. Kang Yong Electric | Bangkok Life vs. Kiatnakin Phatra Bank | Bangkok Life vs. SCG PACKAGING PCL NVDR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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