Correlation Between Bank of America and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Bank of America and The Gabelli 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 The Gabelli 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 The Gabelli Asset, you can compare the effects of market volatilities on Bank of America and The Gabelli 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 The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and The Gabelli.
Diversification Opportunities for Bank of America and The Gabelli
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and The is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and The Gabelli Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Asset 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 The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Asset has no effect on the direction of Bank of America i.e., Bank of America and The Gabelli go up and down completely randomly.
Pair Corralation between Bank of America and The Gabelli
Considering the 90-day investment horizon Bank of America is expected to under-perform the The Gabelli. In addition to that, Bank of America is 1.97 times more volatile than The Gabelli Asset. It trades about -0.24 of its total potential returns per unit of risk. The Gabelli Asset is currently generating about -0.25 per unit of volatility. If you would invest 4,623 in The Gabelli Asset on January 5, 2025 and sell it today you would lose (429.00) from holding The Gabelli Asset or give up 9.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank of America vs. The Gabelli Asset
Performance |
| Timeline |
| Bank of America |
| Gabelli Asset |
Bank of America and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and The Gabelli
The main advantage of trading using opposite Bank of America and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| The Gabelli vs. Highland Longshort Healthcare | The Gabelli vs. Baillie Gifford Health | The Gabelli vs. Deutsche Health And | The Gabelli vs. The Hartford Healthcare |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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