Correlation Between Bank of America and Enviri
Can any of the company-specific risk be diversified away by investing in both Bank of America and Enviri 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 Enviri 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 Enviri, you can compare the effects of market volatilities on Bank of America and Enviri 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 Enviri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Enviri.
Diversification Opportunities for Bank of America and Enviri
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Enviri is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Enviri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enviri 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 Enviri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enviri has no effect on the direction of Bank of America i.e., Bank of America and Enviri go up and down completely randomly.
Pair Corralation between Bank of America and Enviri
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 Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bank of America vs. Enviri
Performance |
| Timeline |
| Bank of America |
| Enviri |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Enviri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Enviri
The main advantage of trading using opposite Bank of America and Enviri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Enviri 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 Enviri will offset losses from the drop in Enviri'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 |
| Enviri vs. Casella Waste Systems | Enviri vs. Montrose Environmental Grp | Enviri vs. Clean Harbors | Enviri vs. Waste Connections |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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