Correlation Between Bank of America and China Clean
Can any of the company-specific risk be diversified away by investing in both Bank of America and China Clean 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 China Clean 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 China Clean Energy, you can compare the effects of market volatilities on Bank of America and China Clean 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 China Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and China Clean.
Diversification Opportunities for Bank of America and China Clean
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and China Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Clean Energy 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 China Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Clean Energy has no effect on the direction of Bank of America i.e., Bank of America and China Clean go up and down completely randomly.
Pair Corralation between Bank of America and China Clean
If you would invest 4,262 in Bank of America on August 27, 2024 and sell it today you would earn a total of 438.00 from holding Bank of America or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. China Clean Energy
Performance |
| Timeline |
| Bank of America |
| China Clean Energy |
Bank of America and China Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and China Clean
The main advantage of trading using opposite Bank of America and China Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, China Clean 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 China Clean will offset losses from the drop in China Clean's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| China Clean vs. First Graphene | China Clean vs. HUMANA INC | China Clean vs. Aquagold International | China Clean vs. Barloworld Ltd ADR |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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