Correlation Between Bank of America and Evofem Biosciences

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bank of America and Evofem Biosciences 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 Evofem Biosciences 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 Evofem Biosciences, you can compare the effects of market volatilities on Bank of America and Evofem Biosciences 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 Evofem Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Evofem Biosciences.

Diversification Opportunities for Bank of America and Evofem Biosciences

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Bank and Evofem is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Evofem Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evofem Biosciences 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 Evofem Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evofem Biosciences has no effect on the direction of Bank of America i.e., Bank of America and Evofem Biosciences go up and down completely randomly.

Pair Corralation between Bank of America and Evofem Biosciences

If you would invest  3,938  in Bank of America on September 1, 2024 and sell it today you would earn a total of  813.00  from holding Bank of America or generate 20.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy0.79%
ValuesDaily Returns

Bank of America  vs.  Evofem Biosciences

 Performance 
       Timeline  
Bank of America 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Bank of America are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bank of America exhibited solid returns over the last few months and may actually be approaching a breakup point.
Evofem Biosciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Evofem Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Evofem Biosciences is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bank of America and Evofem Biosciences Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank of America and Evofem Biosciences

The main advantage of trading using opposite Bank of America and Evofem Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Evofem Biosciences 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 Evofem Biosciences will offset losses from the drop in Evofem Biosciences' long position.
The idea behind Bank of America and Evofem Biosciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Money Managers
Screen money managers from public funds and ETFs managed around the world
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation