Correlation Between Bank of America and Genscript Biotech
Can any of the company-specific risk be diversified away by investing in both Bank of America and Genscript Biotech 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 Genscript Biotech 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 Genscript Biotech, you can compare the effects of market volatilities on Bank of America and Genscript Biotech 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 Genscript Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Genscript Biotech.
Diversification Opportunities for Bank of America and Genscript Biotech
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Genscript is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Genscript Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genscript Biotech 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 Genscript Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genscript Biotech has no effect on the direction of Bank of America i.e., Bank of America and Genscript Biotech go up and down completely randomly.
Pair Corralation between Bank of America and Genscript Biotech
Considering the 90-day investment horizon Bank of America is expected to generate 0.64 times more return on investment than Genscript Biotech. However, Bank of America is 1.56 times less risky than Genscript Biotech. It trades about 0.27 of its potential returns per unit of risk. Genscript Biotech is currently generating about -0.02 per unit of risk. If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Genscript Biotech
Performance |
| Timeline |
| Bank of America |
| Genscript Biotech |
Bank of America and Genscript Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Genscript Biotech
The main advantage of trading using opposite Bank of America and Genscript Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Genscript Biotech 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 Genscript Biotech will offset losses from the drop in Genscript Biotech's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Genscript Biotech vs. Telix Pharmaceuticals Limited | Genscript Biotech vs. Keros Therapeutics | Genscript Biotech vs. Zentalis Pharmaceuticals Llc | Genscript Biotech vs. Innovent Biologics |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |