Correlation Between Bank of America and Cordoba Minerals
Can any of the company-specific risk be diversified away by investing in both Bank of America and Cordoba Minerals 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 Cordoba Minerals 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 Cordoba Minerals Corp, you can compare the effects of market volatilities on Bank of America and Cordoba Minerals 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 Cordoba Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Cordoba Minerals.
Diversification Opportunities for Bank of America and Cordoba Minerals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Cordoba is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Cordoba Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cordoba Minerals 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 Cordoba Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cordoba Minerals Corp has no effect on the direction of Bank of America i.e., Bank of America and Cordoba Minerals go up and down completely randomly.
Pair Corralation between Bank of America and Cordoba Minerals
Considering the 90-day investment horizon Bank of America is expected to generate 1.37 times less return on investment than Cordoba Minerals. But when comparing it to its historical volatility, Bank of America is 3.08 times less risky than Cordoba Minerals. It trades about 0.13 of its potential returns per unit of risk. Cordoba Minerals Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 29.00 in Cordoba Minerals Corp on September 4, 2024 and sell it today you would earn a total of 14.00 from holding Cordoba Minerals Corp or generate 48.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Cordoba Minerals Corp
Performance |
| Timeline |
| Bank of America |
| Cordoba Minerals Corp |
Bank of America and Cordoba Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Cordoba Minerals
The main advantage of trading using opposite Bank of America and Cordoba Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Cordoba Minerals 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 Cordoba Minerals will offset losses from the drop in Cordoba Minerals' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. JPMorgan Chase Co | Bank of America vs. Aquagold International |
| Cordoba Minerals vs. Camino Minerals | Cordoba Minerals vs. Hannan Metals | Cordoba Minerals vs. Atico Mining | Cordoba Minerals vs. Midnight Sun Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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