Correlation Between Bank of America and Franklin Covey
Can any of the company-specific risk be diversified away by investing in both Bank of America and Franklin Covey 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 Franklin Covey 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 Franklin Covey, you can compare the effects of market volatilities on Bank of America and Franklin Covey 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 Franklin Covey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Franklin Covey.
Diversification Opportunities for Bank of America and Franklin Covey
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Franklin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Franklin Covey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Covey 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 Franklin Covey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Covey has no effect on the direction of Bank of America i.e., Bank of America and Franklin Covey go up and down completely randomly.
Pair Corralation between Bank of America and Franklin Covey
Considering the 90-day investment horizon Bank of America is expected to generate 0.49 times more return on investment than Franklin Covey. However, Bank of America is 2.03 times less risky than Franklin Covey. It trades about 0.29 of its potential returns per unit of risk. Franklin Covey is currently generating about -0.08 per unit of risk. If you would invest 4,231 in Bank of America on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Bank of America or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Franklin Covey
Performance |
| Timeline |
| Bank of America |
| Franklin Covey |
Bank of America and Franklin Covey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Franklin Covey
The main advantage of trading using opposite Bank of America and Franklin Covey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Franklin Covey 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 Franklin Covey will offset losses from the drop in Franklin Covey'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 |
| Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |