Correlation Between Bank of America and CTP NV
Can any of the company-specific risk be diversified away by investing in both Bank of America and CTP NV 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 CTP NV 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 CTP NV, you can compare the effects of market volatilities on Bank of America and CTP NV 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 CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CTP NV.
Diversification Opportunities for Bank of America and CTP NV
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and CTP is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CTP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV 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 CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV has no effect on the direction of Bank of America i.e., Bank of America and CTP NV go up and down completely randomly.
Pair Corralation between Bank of America and CTP NV
Considering the 90-day investment horizon Bank of America is expected to generate 1.42 times more return on investment than CTP NV. However, Bank of America is 1.42 times more volatile than CTP NV. It trades about 0.32 of its potential returns per unit of risk. CTP NV is currently generating about -0.03 per unit of risk. If you would invest 4,176 in Bank of America on September 2, 2024 and sell it today you would earn a total of 575.00 from holding Bank of America or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. CTP NV
Performance |
| Timeline |
| Bank of America |
| CTP NV |
Bank of America and CTP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CTP NV
The main advantage of trading using opposite Bank of America and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CTP NV 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 CTP NV will offset losses from the drop in CTP NV'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 |
| CTP NV vs. Warehouses de Pauw | CTP NV vs. VGP NV | CTP NV vs. Eurocommercial Properties NV | CTP NV vs. Koninklijke Heijmans NV |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |