Correlation Between Bank of America and HydroGraph Clean
Can any of the company-specific risk be diversified away by investing in both Bank of America and HydroGraph Clean 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 HydroGraph Clean 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 HydroGraph Clean Power, you can compare the effects of market volatilities on Bank of America and HydroGraph Clean 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 HydroGraph Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and HydroGraph Clean.
Diversification Opportunities for Bank of America and HydroGraph Clean
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and HydroGraph is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and HydroGraph Clean Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HydroGraph Clean Power 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 HydroGraph Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HydroGraph Clean Power has no effect on the direction of Bank of America i.e., Bank of America and HydroGraph Clean go up and down completely randomly.
Pair Corralation between Bank of America and HydroGraph Clean
Considering the 90-day investment horizon Bank of America is expected to generate 5.36 times less return on investment than HydroGraph Clean. But when comparing it to its historical volatility, Bank of America is 6.86 times less risky than HydroGraph Clean. It trades about 0.06 of its potential returns per unit of risk. HydroGraph Clean Power is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9.00 in HydroGraph Clean Power on September 3, 2024 and sell it today you would earn a total of 1.00 from holding HydroGraph Clean Power or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.34% |
| Values | Daily Returns |
Bank of America vs. HydroGraph Clean Power
Performance |
| Timeline |
| Bank of America |
| HydroGraph Clean Power |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Bank of America and HydroGraph Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and HydroGraph Clean
The main advantage of trading using opposite Bank of America and HydroGraph Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, HydroGraph Clean 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 HydroGraph Clean will offset losses from the drop in HydroGraph Clean's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| HydroGraph Clean vs. G6 Materials Corp | HydroGraph Clean vs. Nano One Materials | HydroGraph Clean vs. Haydale Graphene Industries | HydroGraph Clean vs. Orica Ltd ADR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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