Correlation Between Bank of America and Ionic Inflation
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ionic Inflation 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 Ionic Inflation 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 Ionic Inflation Protection, you can compare the effects of market volatilities on Bank of America and Ionic Inflation 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 Ionic Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ionic Inflation.
Diversification Opportunities for Bank of America and Ionic Inflation
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Ionic is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ionic Inflation Protection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ionic Inflation Prot 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 Ionic Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ionic Inflation Prot has no effect on the direction of Bank of America i.e., Bank of America and Ionic Inflation go up and down completely randomly.
Pair Corralation between Bank of America and Ionic Inflation
Considering the 90-day investment horizon Bank of America is expected to generate 5.0 times more return on investment than Ionic Inflation. However, Bank of America is 5.0 times more volatile than Ionic Inflation Protection. It trades about 0.12 of its potential returns per unit of risk. Ionic Inflation Protection is currently generating about 0.05 per unit of risk. If you would invest 3,409 in Bank of America on August 27, 2024 and sell it today you would earn a total of 1,291 from holding Bank of America or generate 37.87% 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. Ionic Inflation Protection
Performance |
| Timeline |
| Bank of America |
| Ionic Inflation Prot |
Bank of America and Ionic Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ionic Inflation
The main advantage of trading using opposite Bank of America and Ionic Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ionic Inflation 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 Ionic Inflation will offset losses from the drop in Ionic Inflation'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 |
| Ionic Inflation vs. iShares Dividend and | Ionic Inflation vs. Martin Currie Sustainable | Ionic Inflation vs. VictoryShares THB Mid | Ionic Inflation vs. Mast Global Battery |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |