Correlation Between Bank of America and Gmo Opportunistic
Can any of the company-specific risk be diversified away by investing in both Bank of America and Gmo Opportunistic 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 Gmo Opportunistic 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 Gmo Opportunistic Income, you can compare the effects of market volatilities on Bank of America and Gmo Opportunistic 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 Gmo Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Gmo Opportunistic.
Diversification Opportunities for Bank of America and Gmo Opportunistic
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Gmo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Gmo Opportunistic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Opportunistic Income 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 Gmo Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Opportunistic Income has no effect on the direction of Bank of America i.e., Bank of America and Gmo Opportunistic go up and down completely randomly.
Pair Corralation between Bank of America and Gmo Opportunistic
Considering the 90-day investment horizon Bank of America is expected to generate 12.52 times more return on investment than Gmo Opportunistic. However, Bank of America is 12.52 times more volatile than Gmo Opportunistic Income. It trades about 0.13 of its potential returns per unit of risk. Gmo Opportunistic Income is currently generating about 0.3 per unit of risk. If you would invest 4,540 in Bank of America on November 7, 2024 and sell it today you would earn a total of 143.00 from holding Bank of America or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank of America vs. Gmo Opportunistic Income
Performance |
| Timeline |
| Bank of America |
| Gmo Opportunistic Income |
Bank of America and Gmo Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Gmo Opportunistic
The main advantage of trading using opposite Bank of America and Gmo Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Gmo Opportunistic 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 Gmo Opportunistic will offset losses from the drop in Gmo Opportunistic'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 |
| Gmo Opportunistic vs. Glg Intl Small | Gmo Opportunistic vs. Franklin Small Cap | Gmo Opportunistic vs. Ab Small Cap | Gmo Opportunistic vs. Ab Small 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |