Correlation Between Bank of America and Canzon Israel
Can any of the company-specific risk be diversified away by investing in both Bank of America and Canzon Israel 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 Canzon Israel 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 Canzon Israel, you can compare the effects of market volatilities on Bank of America and Canzon Israel 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 Canzon Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Canzon Israel.
Diversification Opportunities for Bank of America and Canzon Israel
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Canzon is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Canzon Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canzon Israel 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 Canzon Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canzon Israel has no effect on the direction of Bank of America i.e., Bank of America and Canzon Israel go up and down completely randomly.
Pair Corralation between Bank of America and Canzon Israel
Considering the 90-day investment horizon Bank of America is expected to generate 0.54 times more return on investment than Canzon Israel. However, Bank of America is 1.84 times less risky than Canzon Israel. It trades about 0.1 of its potential returns per unit of risk. Canzon Israel is currently generating about -0.12 per unit of risk. If you would invest 3,883 in Bank of America on August 25, 2024 and sell it today you would earn a total of 817.00 from holding Bank of America or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.59% |
| Values | Daily Returns |
Bank of America vs. Canzon Israel
Performance |
| Timeline |
| Bank of America |
| Canzon Israel |
Bank of America and Canzon Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Canzon Israel
The main advantage of trading using opposite Bank of America and Canzon Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Canzon Israel 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 Canzon Israel will offset losses from the drop in Canzon Israel's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Canzon Israel vs. Hiron Trade Investments Industrial | Canzon Israel vs. B Communications | Canzon Israel vs. Discount Investment Corp | Canzon Israel vs. Oron Group Investments |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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