Correlation Between Bank of America and Calvert Balanced
Can any of the company-specific risk be diversified away by investing in both Bank of America and Calvert Balanced 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 Calvert Balanced 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 Calvert Balanced Portfolio, you can compare the effects of market volatilities on Bank of America and Calvert Balanced 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 Calvert Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Calvert Balanced.
Diversification Opportunities for Bank of America and Calvert Balanced
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Calvert is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Calvert Balanced Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Balanced Por 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 Calvert Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Balanced Por has no effect on the direction of Bank of America i.e., Bank of America and Calvert Balanced go up and down completely randomly.
Pair Corralation between Bank of America and Calvert Balanced
Considering the 90-day investment horizon Bank of America is expected to generate 2.6 times more return on investment than Calvert Balanced. However, Bank of America is 2.6 times more volatile than Calvert Balanced Portfolio. It trades about 0.11 of its potential returns per unit of risk. Calvert Balanced Portfolio is currently generating about 0.14 per unit of risk. If you would invest 3,949 in Bank of America on August 29, 2024 and sell it today you would earn a total of 828.00 from holding Bank of America or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Calvert Balanced Portfolio
Performance |
| Timeline |
| Bank of America |
| Calvert Balanced Por |
Bank of America and Calvert Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Calvert Balanced
The main advantage of trading using opposite Bank of America and Calvert Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Calvert Balanced 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 Calvert Balanced will offset losses from the drop in Calvert Balanced's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| Calvert Balanced vs. American Balanced Fund | Calvert Balanced vs. American Balanced Fund | Calvert Balanced vs. HUMANA INC | Calvert Balanced vs. Aquagold International |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |