Correlation Between Bank of America and Ethereum Name
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ethereum Name 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 Ethereum Name 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 Ethereum Name Service, you can compare the effects of market volatilities on Bank of America and Ethereum Name 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 Ethereum Name. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ethereum Name.
Diversification Opportunities for Bank of America and Ethereum Name
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Ethereum is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ethereum Name Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethereum Name Service 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 Ethereum Name. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethereum Name Service has no effect on the direction of Bank of America i.e., Bank of America and Ethereum Name go up and down completely randomly.
Pair Corralation between Bank of America and Ethereum Name
Considering the 90-day investment horizon Bank of America is expected to generate 6.68 times less return on investment than Ethereum Name. But when comparing it to its historical volatility, Bank of America is 6.11 times less risky than Ethereum Name. It trades about 0.29 of its potential returns per unit of risk. Ethereum Name Service is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,680 in Ethereum Name Service on August 31, 2024 and sell it today you would earn a total of 1,714 from holding Ethereum Name Service or generate 102.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Ethereum Name Service
Performance |
| Timeline |
| Bank of America |
| Ethereum Name Service |
Bank of America and Ethereum Name Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ethereum Name
The main advantage of trading using opposite Bank of America and Ethereum Name positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ethereum Name 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 Ethereum Name will offset losses from the drop in Ethereum Name's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Ethereum Name vs. Ethereum Classic | Ethereum Name vs. Ethereum PoW | Ethereum Name vs. Staked Ether | Ethereum Name vs. EigenLayer |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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