Correlation Between Bank of America and Golden Sun
Can any of the company-specific risk be diversified away by investing in both Bank of America and Golden Sun 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 Golden Sun 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 Golden Sun Education, you can compare the effects of market volatilities on Bank of America and Golden Sun 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 Golden Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Golden Sun.
Diversification Opportunities for Bank of America and Golden Sun
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Golden is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Golden Sun Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Sun Education 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 Golden Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Sun Education has no effect on the direction of Bank of America i.e., Bank of America and Golden Sun go up and down completely randomly.
Pair Corralation between Bank of America and Golden Sun
Considering the 90-day investment horizon Bank of America is expected to generate 0.27 times more return on investment than Golden Sun. However, Bank of America is 3.71 times less risky than Golden Sun. It trades about 0.29 of its potential returns per unit of risk. Golden Sun Education is currently generating about -0.04 per unit of risk. If you would invest 4,231 in Bank of America on August 31, 2024 and sell it today you would earn a total of 546.00 from holding Bank of America or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Golden Sun Education
Performance |
| Timeline |
| Bank of America |
| Golden Sun Education |
Bank of America and Golden Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Golden Sun
The main advantage of trading using opposite Bank of America and Golden Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Golden Sun 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 Golden Sun will offset losses from the drop in Golden Sun's long position.| Bank of America vs. RLJ Lodging Trust | Bank of America vs. Aquagold International | Bank of America vs. Stepstone Group | Bank of America vs. Morningstar Unconstrained Allocation |
| Golden Sun vs. Wah Fu Education | Golden Sun vs. QuantaSing Group Limited | Golden Sun vs. Genius Group | Golden Sun vs. China Liberal Education |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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