Correlation Between Bank of America and Columbia Integrated
Can any of the company-specific risk be diversified away by investing in both Bank of America and Columbia Integrated 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 Columbia Integrated 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 Columbia Integrated Large, you can compare the effects of market volatilities on Bank of America and Columbia Integrated 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 Columbia Integrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Columbia Integrated.
Diversification Opportunities for Bank of America and Columbia Integrated
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Columbia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Columbia Integrated Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Integrated Large 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 Columbia Integrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Integrated Large has no effect on the direction of Bank of America i.e., Bank of America and Columbia Integrated go up and down completely randomly.
Pair Corralation between Bank of America and Columbia Integrated
Considering the 90-day investment horizon Bank of America is expected to under-perform the Columbia Integrated. In addition to that, Bank of America is 1.55 times more volatile than Columbia Integrated Large. It trades about -0.31 of its total potential returns per unit of risk. Columbia Integrated Large is currently generating about -0.2 per unit of volatility. If you would invest 1,053 in Columbia Integrated Large on November 27, 2024 and sell it today you would lose (25.00) from holding Columbia Integrated Large or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Columbia Integrated Large
Performance |
| Timeline |
| Bank of America |
| Columbia Integrated Large |
Bank of America and Columbia Integrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Columbia Integrated
The main advantage of trading using opposite Bank of America and Columbia Integrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Columbia Integrated 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 Columbia Integrated will offset losses from the drop in Columbia Integrated'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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