Correlation Between Bank of America and 8x8 Common
Can any of the company-specific risk be diversified away by investing in both Bank of America and 8x8 Common 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 8x8 Common 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 8x8 Common Stock, you can compare the effects of market volatilities on Bank of America and 8x8 Common 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 8x8 Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 8x8 Common.
Diversification Opportunities for Bank of America and 8x8 Common
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and 8x8 is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and 8x8 Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 8x8 Common Stock 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 8x8 Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 8x8 Common Stock has no effect on the direction of Bank of America i.e., Bank of America and 8x8 Common go up and down completely randomly.
Pair Corralation between Bank of America and 8x8 Common
Considering the 90-day investment horizon Bank of America is expected to generate 3.54 times less return on investment than 8x8 Common. But when comparing it to its historical volatility, Bank of America is 2.3 times less risky than 8x8 Common. It trades about 0.27 of its potential returns per unit of risk. 8x8 Common Stock is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 210.00 in 8x8 Common Stock on August 30, 2024 and sell it today you would earn a total of 104.00 from holding 8x8 Common Stock or generate 49.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. 8x8 Common Stock
Performance |
| Timeline |
| Bank of America |
| 8x8 Common Stock |
Bank of America and 8x8 Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 8x8 Common
The main advantage of trading using opposite Bank of America and 8x8 Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 8x8 Common 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 8x8 Common will offset losses from the drop in 8x8 Common'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 |
| 8x8 Common vs. Workday | 8x8 Common vs. Digital Turbine | 8x8 Common vs. Bill Com Holdings | 8x8 Common vs. Autodesk |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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