Correlation Between Bank of America and Berry Petroleum
Can any of the company-specific risk be diversified away by investing in both Bank of America and Berry Petroleum 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 Berry Petroleum 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 Berry Petroleum Corp, you can compare the effects of market volatilities on Bank of America and Berry Petroleum 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 Berry Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Berry Petroleum.
Diversification Opportunities for Bank of America and Berry Petroleum
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Berry is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Berry Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berry Petroleum Corp 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 Berry Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berry Petroleum Corp has no effect on the direction of Bank of America i.e., Bank of America and Berry Petroleum go up and down completely randomly.
Pair Corralation between Bank of America and Berry Petroleum
Considering the 90-day investment horizon Bank of America is expected to generate 0.66 times more return on investment than Berry Petroleum. However, Bank of America is 1.52 times less risky than Berry Petroleum. It trades about 0.06 of its potential returns per unit of risk. Berry Petroleum Corp is currently generating about -0.02 per unit of risk. If you would invest 3,138 in Bank of America on August 27, 2024 and sell it today you would earn a total of 1,562 from holding Bank of America or generate 49.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Berry Petroleum Corp
Performance |
| Timeline |
| Bank of America |
| Berry Petroleum Corp |
Bank of America and Berry Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Berry Petroleum
The main advantage of trading using opposite Bank of America and Berry Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Berry Petroleum 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 Berry Petroleum will offset losses from the drop in Berry Petroleum's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Berry Petroleum vs. California Resources Corp | Berry Petroleum vs. Magnolia Oil Gas | Berry Petroleum vs. Comstock Resources | Berry Petroleum vs. Gulfport Energy Operating |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |