Correlation Between Bank of America and Bonanza Goldfields
Can any of the company-specific risk be diversified away by investing in both Bank of America and Bonanza Goldfields 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 Bonanza Goldfields 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 Bonanza Goldfields, you can compare the effects of market volatilities on Bank of America and Bonanza Goldfields 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 Bonanza Goldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Bonanza Goldfields.
Diversification Opportunities for Bank of America and Bonanza Goldfields
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Bonanza is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Bonanza Goldfields in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonanza Goldfields 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 Bonanza Goldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonanza Goldfields has no effect on the direction of Bank of America i.e., Bank of America and Bonanza Goldfields go up and down completely randomly.
Pair Corralation between Bank of America and Bonanza Goldfields
If you would invest 2,663 in Bank of America on January 6, 2025 and sell it today you would earn a total of 776.00 from holding Bank of America or generate 29.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bank of America vs. Bonanza Goldfields
Performance |
| Timeline |
| Bank of America |
| Bonanza Goldfields |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Bank of America and Bonanza Goldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Bonanza Goldfields
The main advantage of trading using opposite Bank of America and Bonanza Goldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Bonanza Goldfields 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 Bonanza Goldfields will offset losses from the drop in Bonanza Goldfields' long position.| Bank of America vs. Barclays PLC ADR | Bank of America vs. ING Group NV | Bank of America vs. Banco Santander SA | Bank of America vs. HSBC Holdings PLC |
| Bonanza Goldfields vs. Metallis Resources | Bonanza Goldfields vs. Macmahon Holdings Limited | Bonanza Goldfields vs. Prime Meridian Resources | Bonanza Goldfields vs. Mundoro Capital |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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