Correlation Between Bank of America and CH Karnchang
Can any of the company-specific risk be diversified away by investing in both Bank of America and CH Karnchang 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 CH Karnchang 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 CH Karnchang Public, you can compare the effects of market volatilities on Bank of America and CH Karnchang 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 CH Karnchang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CH Karnchang.
Diversification Opportunities for Bank of America and CH Karnchang
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and CH Karnchang is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CH Karnchang Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Karnchang Public 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 CH Karnchang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Karnchang Public has no effect on the direction of Bank of America i.e., Bank of America and CH Karnchang go up and down completely randomly.
Pair Corralation between Bank of America and CH Karnchang
Considering the 90-day investment horizon Bank of America is expected to generate 1.19 times more return on investment than CH Karnchang. However, Bank of America is 1.19 times more volatile than CH Karnchang Public. It trades about 0.27 of its potential returns per unit of risk. CH Karnchang Public is currently generating about -0.09 per unit of risk. If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. CH Karnchang Public
Performance |
| Timeline |
| Bank of America |
| CH Karnchang Public |
Bank of America and CH Karnchang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CH Karnchang
The main advantage of trading using opposite Bank of America and CH Karnchang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CH Karnchang 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 CH Karnchang will offset losses from the drop in CH Karnchang's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| CH Karnchang vs. Tata Steel Public | CH Karnchang vs. Thaifoods Group Public | CH Karnchang vs. TMT Steel Public | CH Karnchang vs. The Erawan Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |