Correlation Between Bank of America and Copper Lake
Can any of the company-specific risk be diversified away by investing in both Bank of America and Copper Lake 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 Copper Lake 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 Copper Lake Resources, you can compare the effects of market volatilities on Bank of America and Copper Lake 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 Copper Lake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Copper Lake.
Diversification Opportunities for Bank of America and Copper Lake
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Copper is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Copper Lake Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper Lake Resources 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 Copper Lake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper Lake Resources has no effect on the direction of Bank of America i.e., Bank of America and Copper Lake go up and down completely randomly.
Pair Corralation between Bank of America and Copper Lake
Considering the 90-day investment horizon Bank of America is expected to generate 3.62 times less return on investment than Copper Lake. But when comparing it to its historical volatility, Bank of America is 17.93 times less risky than Copper Lake. It trades about 0.31 of its potential returns per unit of risk. Copper Lake Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Copper Lake Resources on September 1, 2024 and sell it today you would lose (0.50) from holding Copper Lake Resources or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Copper Lake Resources
Performance |
| Timeline |
| Bank of America |
| Copper Lake Resources |
Bank of America and Copper Lake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Copper Lake
The main advantage of trading using opposite Bank of America and Copper Lake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Copper Lake 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 Copper Lake will offset losses from the drop in Copper Lake's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Copper Lake vs. Black Widow Resources | Copper Lake vs. Eros Resources Corp | Copper Lake vs. Magnum Goldcorp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |