Correlation Between Bank of America and Us Targeted
Can any of the company-specific risk be diversified away by investing in both Bank of America and Us Targeted 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 Us Targeted 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 Us Targeted Value, you can compare the effects of market volatilities on Bank of America and Us Targeted 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 Us Targeted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Us Targeted.
Diversification Opportunities for Bank of America and Us Targeted
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and DFFVX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Us Targeted Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Targeted Value 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 Us Targeted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Targeted Value has no effect on the direction of Bank of America i.e., Bank of America and Us Targeted go up and down completely randomly.
Pair Corralation between Bank of America and Us Targeted
Considering the 90-day investment horizon Bank of America is expected to generate 1.18 times more return on investment than Us Targeted. However, Bank of America is 1.18 times more volatile than Us Targeted Value. It trades about 0.14 of its potential returns per unit of risk. Us Targeted Value is currently generating about 0.09 per unit of risk. If you would invest 2,873 in Bank of America on August 24, 2024 and sell it today you would earn a total of 1,836 from holding Bank of America or generate 63.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bank of America vs. Us Targeted Value
Performance |
| Timeline |
| Bank of America |
| Us Targeted Value |
Bank of America and Us Targeted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Us Targeted
The main advantage of trading using opposite Bank of America and Us Targeted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Us Targeted 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 Us Targeted will offset losses from the drop in Us Targeted's long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
| Us Targeted vs. Abr 7525 Volatility | Us Targeted vs. Volumetric Fund Volumetric | Us Targeted vs. Sarofim Equity | Us Targeted vs. T Rowe Price |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Stocks Directory Find actively traded stocks across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |