Correlation Between Bank of America and C21 Investments
Can any of the company-specific risk be diversified away by investing in both Bank of America and C21 Investments 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 C21 Investments 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 C21 Investments, you can compare the effects of market volatilities on Bank of America and C21 Investments 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 C21 Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and C21 Investments.
Diversification Opportunities for Bank of America and C21 Investments
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and C21 is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and C21 Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C21 Investments 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 C21 Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C21 Investments has no effect on the direction of Bank of America i.e., Bank of America and C21 Investments go up and down completely randomly.
Pair Corralation between Bank of America and C21 Investments
Considering the 90-day investment horizon Bank of America is expected to generate 1.92 times less return on investment than C21 Investments. But when comparing it to its historical volatility, Bank of America is 4.47 times less risky than C21 Investments. It trades about 0.05 of its potential returns per unit of risk. C21 Investments is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30.00 in C21 Investments on August 26, 2024 and sell it today you would lose (10.00) from holding C21 Investments or give up 33.33% 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. C21 Investments
Performance |
| Timeline |
| Bank of America |
| C21 Investments |
Bank of America and C21 Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and C21 Investments
The main advantage of trading using opposite Bank of America and C21 Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, C21 Investments 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 C21 Investments will offset losses from the drop in C21 Investments' 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 |
| C21 Investments vs. Green Cures Botanical | C21 Investments vs. Galexxy Holdings | C21 Investments vs. Indoor Harvest Corp | C21 Investments vs. Speakeasy Cannabis Club |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |