Correlation Between Bank of America and Gas Natural
Can any of the company-specific risk be diversified away by investing in both Bank of America and Gas Natural 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 Gas Natural 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 Gas Natural Chile, you can compare the effects of market volatilities on Bank of America and Gas Natural 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 Gas Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Gas Natural.
Diversification Opportunities for Bank of America and Gas Natural
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Gas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Gas Natural Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gas Natural Chile 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 Gas Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gas Natural Chile has no effect on the direction of Bank of America i.e., Bank of America and Gas Natural go up and down completely randomly.
Pair Corralation between Bank of America and Gas Natural
If you would invest 3,938 in Bank of America on August 31, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% 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. Gas Natural Chile
Performance |
| Timeline |
| Bank of America |
| Gas Natural Chile |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Gas Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Gas Natural
The main advantage of trading using opposite Bank of America and Gas Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Gas Natural 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 Gas Natural will offset losses from the drop in Gas Natural's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Gas Natural vs. Aguas Andinas SA | Gas Natural vs. Parq Arauco | Gas Natural vs. Enel Generacin Chile | Gas Natural vs. Sociedad Matriz SAAM |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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