Correlation Between Bank of America and GBT Technologies
Can any of the company-specific risk be diversified away by investing in both Bank of America and GBT Technologies 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 GBT Technologies 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 GBT Technologies, you can compare the effects of market volatilities on Bank of America and GBT Technologies 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 GBT Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and GBT Technologies.
Diversification Opportunities for Bank of America and GBT Technologies
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and GBT is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and GBT Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBT Technologies 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 GBT Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBT Technologies has no effect on the direction of Bank of America i.e., Bank of America and GBT Technologies go up and down completely randomly.
Pair Corralation between Bank of America and GBT Technologies
Considering the 90-day investment horizon Bank of America is expected to generate 71.59 times less return on investment than GBT Technologies. But when comparing it to its historical volatility, Bank of America is 108.08 times less risky than GBT Technologies. It trades about 0.29 of its potential returns per unit of risk. GBT Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.01 in GBT Technologies on August 31, 2024 and sell it today you would earn a total of 0.00 from holding GBT Technologies or generate 0.0% 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. GBT Technologies
Performance |
| Timeline |
| Bank of America |
| GBT Technologies |
Bank of America and GBT Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and GBT Technologies
The main advantage of trading using opposite Bank of America and GBT Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, GBT Technologies 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 GBT Technologies will offset losses from the drop in GBT Technologies' 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 |
| GBT Technologies vs. SEATech Ventures Corp | GBT Technologies vs. Alternet Systems | GBT Technologies vs. Crypto Co | GBT Technologies vs. Xalles 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 Stocks Directory module to find actively traded stocks across global markets.
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