Correlation Between Bank of America and Bolt Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both Bank of America and Bolt Biotherapeutics 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 Bolt Biotherapeutics 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 Bolt Biotherapeutics, you can compare the effects of market volatilities on Bank of America and Bolt Biotherapeutics 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 Bolt Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Bolt Biotherapeutics.
Diversification Opportunities for Bank of America and Bolt Biotherapeutics
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Bolt is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Bolt Biotherapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Biotherapeutics 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 Bolt Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Biotherapeutics has no effect on the direction of Bank of America i.e., Bank of America and Bolt Biotherapeutics go up and down completely randomly.
Pair Corralation between Bank of America and Bolt Biotherapeutics
Considering the 90-day investment horizon Bank of America is expected to generate 0.4 times more return on investment than Bolt Biotherapeutics. However, Bank of America is 2.51 times less risky than Bolt Biotherapeutics. It trades about 0.06 of its potential returns per unit of risk. Bolt Biotherapeutics is currently generating about -0.02 per unit of risk. If you would invest 3,114 in Bank of America on August 28, 2024 and sell it today you would earn a total of 1,661 from holding Bank of America or generate 53.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Bolt Biotherapeutics
Performance |
| Timeline |
| Bank of America |
| Bolt Biotherapeutics |
Bank of America and Bolt Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Bolt Biotherapeutics
The main advantage of trading using opposite Bank of America and Bolt Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Bolt Biotherapeutics 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 Bolt Biotherapeutics will offset losses from the drop in Bolt Biotherapeutics' long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Bolt Biotherapeutics vs. Eliem Therapeutics | Bolt Biotherapeutics vs. Scpharmaceuticals | Bolt Biotherapeutics vs. Milestone Pharmaceuticals | Bolt Biotherapeutics vs. Seres Therapeutics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |