Correlation Between Bank of America and IDJ FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Bank of America and IDJ FINANCIAL 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 IDJ FINANCIAL 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 IDJ FINANCIAL, you can compare the effects of market volatilities on Bank of America and IDJ FINANCIAL 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 IDJ FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and IDJ FINANCIAL.
Diversification Opportunities for Bank of America and IDJ FINANCIAL
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and IDJ is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and IDJ FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDJ FINANCIAL 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 IDJ FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDJ FINANCIAL has no effect on the direction of Bank of America i.e., Bank of America and IDJ FINANCIAL go up and down completely randomly.
Pair Corralation between Bank of America and IDJ FINANCIAL
Considering the 90-day investment horizon Bank of America is expected to generate 0.55 times more return on investment than IDJ FINANCIAL. However, Bank of America is 1.81 times less risky than IDJ FINANCIAL. It trades about 0.1 of its potential returns per unit of risk. IDJ FINANCIAL is currently generating about -0.07 per unit of risk. If you would invest 3,946 in Bank of America on September 3, 2024 and sell it today you would earn a total of 758.00 from holding Bank of America or generate 19.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.43% |
| Values | Daily Returns |
Bank of America vs. IDJ FINANCIAL
Performance |
| Timeline |
| Bank of America |
| IDJ FINANCIAL |
Bank of America and IDJ FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and IDJ FINANCIAL
The main advantage of trading using opposite Bank of America and IDJ FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, IDJ FINANCIAL 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 IDJ FINANCIAL will offset losses from the drop in IDJ FINANCIAL'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 |
| IDJ FINANCIAL vs. DIC Holdings Construction | IDJ FINANCIAL vs. FPT Digital Retail | IDJ FINANCIAL vs. Danang Education Investment | IDJ FINANCIAL vs. Agriculture Printing and |
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.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |