Correlation Between Bank of America and Invesco Real
Can any of the company-specific risk be diversified away by investing in both Bank of America and Invesco Real 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 Invesco Real 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 Invesco Real Estate, you can compare the effects of market volatilities on Bank of America and Invesco Real 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 Invesco Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Invesco Real.
Diversification Opportunities for Bank of America and Invesco Real
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Invesco is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Invesco Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Real Estate 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 Invesco Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Real Estate has no effect on the direction of Bank of America i.e., Bank of America and Invesco Real go up and down completely randomly.
Pair Corralation between Bank of America and Invesco Real
Considering the 90-day investment horizon Bank of America is expected to under-perform the Invesco Real. In addition to that, Bank of America is 1.18 times more volatile than Invesco Real Estate. It trades about -0.31 of its total potential returns per unit of risk. Invesco Real Estate is currently generating about 0.04 per unit of volatility. If you would invest 1,715 in Invesco Real Estate on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Invesco Real Estate or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Invesco Real Estate
Performance |
| Timeline |
| Bank of America |
| Invesco Real Estate |
Bank of America and Invesco Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Invesco Real
The main advantage of trading using opposite Bank of America and Invesco Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Invesco Real 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 Invesco Real will offset losses from the drop in Invesco Real's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Invesco Real vs. T Rowe Price | Invesco Real vs. Ab Municipal Bond | Invesco Real vs. Ab Municipal Bond | Invesco Real vs. Prudential California Muni |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Directory Find actively traded commodities issued by global exchanges |