Correlation Between Bank of America and Financial Strategies
Can any of the company-specific risk be diversified away by investing in both Bank of America and Financial Strategies 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 Financial Strategies 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 Financial Strategies Acquisition, you can compare the effects of market volatilities on Bank of America and Financial Strategies 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 Financial Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Financial Strategies.
Diversification Opportunities for Bank of America and Financial Strategies
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Financial is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies 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 Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of Bank of America i.e., Bank of America and Financial Strategies go up and down completely randomly.
Pair Corralation between Bank of America and Financial Strategies
If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Bank of America vs. Financial Strategies Acquisiti
Performance |
| Timeline |
| Bank of America |
| Financial Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Financial Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Financial Strategies
The main advantage of trading using opposite Bank of America and Financial Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Financial Strategies 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 Financial Strategies will offset losses from the drop in Financial Strategies' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |