Correlation Between Bank of America and Center Coast
Can any of the company-specific risk be diversified away by investing in both Bank of America and Center Coast 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 Center Coast 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 Center St Mlp, you can compare the effects of market volatilities on Bank of America and Center Coast 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 Center Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Center Coast.
Diversification Opportunities for Bank of America and Center Coast
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Center is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Center St Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Center St Mlp 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 Center Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Center St Mlp has no effect on the direction of Bank of America i.e., Bank of America and Center Coast go up and down completely randomly.
Pair Corralation between Bank of America and Center Coast
Considering the 90-day investment horizon Bank of America is expected to under-perform the Center Coast. But the stock apears to be less risky and, when comparing its historical volatility, Bank of America is 1.38 times less risky than Center Coast. The stock trades about -0.31 of its potential returns per unit of risk. The Center St Mlp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 699.00 in Center St Mlp on November 27, 2024 and sell it today you would earn a total of 2.00 from holding Center St Mlp or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Center St Mlp
Performance |
| Timeline |
| Bank of America |
| Center St Mlp |
Bank of America and Center Coast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Center Coast
The main advantage of trading using opposite Bank of America and Center Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Center Coast 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 Center Coast will offset losses from the drop in Center Coast'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. Royal Bank of |
| Center Coast vs. Fidelity Vertible Securities | Center Coast vs. Virtus Convertible | Center Coast vs. Harbor Vertible Securities | Center Coast vs. Teton Vertible Securities |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |