Correlation Between Bank of America and DoubleDragon Properties
Can any of the company-specific risk be diversified away by investing in both Bank of America and DoubleDragon Properties 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 DoubleDragon Properties 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 DoubleDragon Properties Corp, you can compare the effects of market volatilities on Bank of America and DoubleDragon Properties 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 DoubleDragon Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and DoubleDragon Properties.
Diversification Opportunities for Bank of America and DoubleDragon Properties
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and DoubleDragon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and DoubleDragon Properties Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleDragon Properties 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 DoubleDragon Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleDragon Properties has no effect on the direction of Bank of America i.e., Bank of America and DoubleDragon Properties go up and down completely randomly.
Pair Corralation between Bank of America and DoubleDragon Properties
Considering the 90-day investment horizon Bank of America is expected to generate 0.66 times more return on investment than DoubleDragon Properties. However, Bank of America is 1.51 times less risky than DoubleDragon Properties. It trades about 0.08 of its potential returns per unit of risk. DoubleDragon Properties Corp is currently generating about 0.05 per unit of risk. If you would invest 2,660 in Bank of America on November 27, 2024 and sell it today you would earn a total of 1,786 from holding Bank of America or generate 67.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.24% |
| Values | Daily Returns |
Bank of America vs. DoubleDragon Properties Corp
Performance |
| Timeline |
| Bank of America |
| DoubleDragon Properties |
Bank of America and DoubleDragon Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and DoubleDragon Properties
The main advantage of trading using opposite Bank of America and DoubleDragon Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, DoubleDragon Properties 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 DoubleDragon Properties will offset losses from the drop in DoubleDragon Properties' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| DoubleDragon Properties vs. Atlas Consolidated Mining | DoubleDragon Properties vs. Apex Mining Co | DoubleDragon Properties vs. Jollibee Foods Corp | DoubleDragon Properties vs. Philex Mining Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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