Correlation Between Bank of America and CapitaLand Integrated
Can any of the company-specific risk be diversified away by investing in both Bank of America and CapitaLand Integrated 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 CapitaLand Integrated 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 CapitaLand Integrated Commercial, you can compare the effects of market volatilities on Bank of America and CapitaLand Integrated 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 CapitaLand Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CapitaLand Integrated.
Diversification Opportunities for Bank of America and CapitaLand Integrated
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and CapitaLand is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CapitaLand Integrated Commerci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Integrated 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 CapitaLand Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Integrated has no effect on the direction of Bank of America i.e., Bank of America and CapitaLand Integrated go up and down completely randomly.
Pair Corralation between Bank of America and CapitaLand Integrated
Considering the 90-day investment horizon Bank of America is expected to generate 0.39 times more return on investment than CapitaLand Integrated. However, Bank of America is 2.57 times less risky than CapitaLand Integrated. It trades about -0.18 of its potential returns per unit of risk. CapitaLand Integrated Commercial is currently generating about -0.23 per unit of risk. If you would invest 4,675 in Bank of America on October 7, 2024 and sell it today you would lose (194.00) from holding Bank of America or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. CapitaLand Integrated Commerci
Performance |
| Timeline |
| Bank of America |
| CapitaLand Integrated |
Bank of America and CapitaLand Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CapitaLand Integrated
The main advantage of trading using opposite Bank of America and CapitaLand Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CapitaLand Integrated 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 CapitaLand Integrated will offset losses from the drop in CapitaLand Integrated's long position.| Bank of America vs. Aquagold International | Bank of America vs. Alibaba Group Holding | Bank of America vs. Banco Bradesco SA | Bank of America vs. HP Inc |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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