Correlation Between Bank of America and CHKEZ Old
Can any of the company-specific risk be diversified away by investing in both Bank of America and CHKEZ Old 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 CHKEZ Old 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 CHKEZ Old, you can compare the effects of market volatilities on Bank of America and CHKEZ Old 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 CHKEZ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CHKEZ Old.
Diversification Opportunities for Bank of America and CHKEZ Old
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and CHKEZ is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CHKEZ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEZ Old 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 CHKEZ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEZ Old has no effect on the direction of Bank of America i.e., Bank of America and CHKEZ Old go up and down completely randomly.
Pair Corralation between Bank of America and CHKEZ Old
Considering the 90-day investment horizon Bank of America is expected to generate 0.74 times more return on investment than CHKEZ Old. However, Bank of America is 1.35 times less risky than CHKEZ Old. It trades about 0.04 of its potential returns per unit of risk. CHKEZ Old is currently generating about 0.0 per unit of risk. If you would invest 3,445 in Bank of America on October 25, 2024 and sell it today you would earn a total of 1,134 from holding Bank of America or generate 32.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.79% |
| Values | Daily Returns |
Bank of America vs. CHKEZ Old
Performance |
| Timeline |
| Bank of America |
| CHKEZ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and CHKEZ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CHKEZ Old
The main advantage of trading using opposite Bank of America and CHKEZ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CHKEZ Old 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 CHKEZ Old will offset losses from the drop in CHKEZ Old's long position.| Bank of America vs. JPMorgan Chase Co | Bank of America vs. Bank of America | Bank of America vs. RLJ Lodging Trust | Bank of America vs. PennyMac Finl Svcs |
| CHKEZ Old vs. Magnite | CHKEZ Old vs. Interpublic Group of | CHKEZ Old vs. Townsquare Media | CHKEZ Old vs. Coupang LLC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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