Correlation Between Bank of America and Amg Managers
Can any of the company-specific risk be diversified away by investing in both Bank of America and Amg Managers 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 Amg Managers 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 Amg Managers Fairpointe, you can compare the effects of market volatilities on Bank of America and Amg Managers 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 Amg Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Amg Managers.
Diversification Opportunities for Bank of America and Amg Managers
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Amg is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Amg Managers Fairpointe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Managers Fairpointe 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 Amg Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Managers Fairpointe has no effect on the direction of Bank of America i.e., Bank of America and Amg Managers go up and down completely randomly.
Pair Corralation between Bank of America and Amg Managers
Considering the 90-day investment horizon Bank of America is expected to generate 1.83 times more return on investment than Amg Managers. However, Bank of America is 1.83 times more volatile than Amg Managers Fairpointe. It trades about 0.21 of its potential returns per unit of risk. Amg Managers Fairpointe is currently generating about 0.2 per unit of risk. If you would invest 4,455 in Bank of America on October 26, 2024 and sell it today you would earn a total of 226.00 from holding Bank of America or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bank of America vs. Amg Managers Fairpointe
Performance |
| Timeline |
| Bank of America |
| Amg Managers Fairpointe |
Bank of America and Amg Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Amg Managers
The main advantage of trading using opposite Bank of America and Amg Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Amg Managers 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 Amg Managers will offset losses from the drop in Amg Managers' long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| Amg Managers vs. Amg Yacktman Focused | Amg Managers vs. Heartland Value Plus | Amg Managers vs. Common Stock Fund | Amg Managers vs. Perkins Mid Cap |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |