Correlation Between Bank of America and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both Bank of America and Fidelity Global 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 Fidelity Global 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 Fidelity Global Modity, you can compare the effects of market volatilities on Bank of America and Fidelity Global 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 Fidelity Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Fidelity Global.
Diversification Opportunities for Bank of America and Fidelity Global
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Fidelity is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Fidelity Global Modity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Modity 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 Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Modity has no effect on the direction of Bank of America i.e., Bank of America and Fidelity Global go up and down completely randomly.
Pair Corralation between Bank of America and Fidelity Global
Considering the 90-day investment horizon Bank of America is expected to generate 1.51 times more return on investment than Fidelity Global. However, Bank of America is 1.51 times more volatile than Fidelity Global Modity. It trades about 0.1 of its potential returns per unit of risk. Fidelity Global Modity is currently generating about 0.01 per unit of risk. 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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank of America vs. Fidelity Global Modity
Performance |
| Timeline |
| Bank of America |
| Fidelity Global Modity |
Bank of America and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Fidelity Global
The main advantage of trading using opposite Bank of America and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Fidelity Global 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 Fidelity Global will offset losses from the drop in Fidelity Global's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Fidelity Global vs. Materials Portfolio Materials | Fidelity Global vs. Fidelity Natural Resources | Fidelity Global vs. Utilities Portfolio Utilities | Fidelity Global vs. Automotive Portfolio Automotive |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |