Correlation Between Bank of America and CI Canadian
Can any of the company-specific risk be diversified away by investing in both Bank of America and CI Canadian 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 CI Canadian 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 CI Canadian Banks, you can compare the effects of market volatilities on Bank of America and CI Canadian 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 CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CI Canadian.
Diversification Opportunities for Bank of America and CI Canadian
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and CIC is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CI Canadian Banks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Banks 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 CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Banks has no effect on the direction of Bank of America i.e., Bank of America and CI Canadian go up and down completely randomly.
Pair Corralation between Bank of America and CI Canadian
Considering the 90-day investment horizon Bank of America is expected to generate 2.57 times more return on investment than CI Canadian. However, Bank of America is 2.57 times more volatile than CI Canadian Banks. It trades about 0.1 of its potential returns per unit of risk. CI Canadian Banks is currently generating about 0.16 per unit of risk. If you would invest 3,278 in Bank of America on October 25, 2024 and sell it today you would earn a total of 1,301 from holding Bank of America or generate 39.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. CI Canadian Banks
Performance |
| Timeline |
| Bank of America |
| CI Canadian Banks |
Bank of America and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CI Canadian
The main advantage of trading using opposite Bank of America and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CI Canadian 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 CI Canadian will offset losses from the drop in CI Canadian'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 |
| CI Canadian vs. Celestica | CI Canadian vs. Descartes Systems Group | CI Canadian vs. Hamilton Mid Cap Financials | CI Canadian vs. CI Canada Lifeco |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |