Correlation Between Bank of America and Mainstay Pinestone
Can any of the company-specific risk be diversified away by investing in both Bank of America and Mainstay Pinestone 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 Mainstay Pinestone 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 Mainstay Pinestone International, you can compare the effects of market volatilities on Bank of America and Mainstay Pinestone 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 Mainstay Pinestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Mainstay Pinestone.
Diversification Opportunities for Bank of America and Mainstay Pinestone
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Mainstay is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Mainstay Pinestone Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Pinestone 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 Mainstay Pinestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Pinestone has no effect on the direction of Bank of America i.e., Bank of America and Mainstay Pinestone go up and down completely randomly.
Pair Corralation between Bank of America and Mainstay Pinestone
Considering the 90-day investment horizon Bank of America is expected to generate 1.36 times less return on investment than Mainstay Pinestone. But when comparing it to its historical volatility, Bank of America is 1.04 times less risky than Mainstay Pinestone. It trades about 0.05 of its potential returns per unit of risk. Mainstay Pinestone International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,176 in Mainstay Pinestone International on August 26, 2024 and sell it today you would earn a total of 452.00 from holding Mainstay Pinestone International or generate 38.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 63.38% |
| Values | Daily Returns |
Bank of America vs. Mainstay Pinestone Internation
Performance |
| Timeline |
| Bank of America |
| Mainstay Pinestone |
Bank of America and Mainstay Pinestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Mainstay Pinestone
The main advantage of trading using opposite Bank of America and Mainstay Pinestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Mainstay Pinestone 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 Mainstay Pinestone will offset losses from the drop in Mainstay Pinestone's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Mainstay Pinestone vs. Mainstay High Yield | Mainstay Pinestone vs. Mainstay Tax Free | Mainstay Pinestone vs. Mainstay Income Builder | Mainstay Pinestone vs. Mainstay Large Cap |
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.
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