Correlation Between Bank of America and Nicola Mining
Can any of the company-specific risk be diversified away by investing in both Bank of America and Nicola Mining 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 Nicola Mining 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 Nicola Mining, you can compare the effects of market volatilities on Bank of America and Nicola Mining 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 Nicola Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nicola Mining.
Diversification Opportunities for Bank of America and Nicola Mining
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Nicola is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nicola Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicola Mining 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 Nicola Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicola Mining has no effect on the direction of Bank of America i.e., Bank of America and Nicola Mining go up and down completely randomly.
Pair Corralation between Bank of America and Nicola Mining
Considering the 90-day investment horizon Bank of America is expected to generate 0.25 times more return on investment than Nicola Mining. However, Bank of America is 3.96 times less risky than Nicola Mining. It trades about 0.12 of its potential returns per unit of risk. Nicola Mining is currently generating about 0.02 per unit of risk. If you would invest 3,824 in Bank of America on August 27, 2024 and sell it today you would earn a total of 926.00 from holding Bank of America or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.06% |
| Values | Daily Returns |
Bank of America vs. Nicola Mining
Performance |
| Timeline |
| Bank of America |
| Nicola Mining |
Bank of America and Nicola Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nicola Mining
The main advantage of trading using opposite Bank of America and Nicola Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nicola Mining 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 Nicola Mining will offset losses from the drop in Nicola Mining's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| 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 | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |