Correlation Between Bank of America and Innerscope Advertising
Can any of the company-specific risk be diversified away by investing in both Bank of America and Innerscope Advertising 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 Innerscope Advertising 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 Innerscope Advertising Agency, you can compare the effects of market volatilities on Bank of America and Innerscope Advertising 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 Innerscope Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Innerscope Advertising.
Diversification Opportunities for Bank of America and Innerscope Advertising
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Innerscope is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Innerscope Advertising Agency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innerscope Advertising 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 Innerscope Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innerscope Advertising has no effect on the direction of Bank of America i.e., Bank of America and Innerscope Advertising go up and down completely randomly.
Pair Corralation between Bank of America and Innerscope Advertising
Considering the 90-day investment horizon Bank of America is expected to generate 11.37 times less return on investment than Innerscope Advertising. But when comparing it to its historical volatility, Bank of America is 17.25 times less risky than Innerscope Advertising. It trades about 0.11 of its potential returns per unit of risk. Innerscope Advertising Agency is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 650.00 in Innerscope Advertising Agency on August 26, 2024 and sell it today you would lose (641.86) from holding Innerscope Advertising Agency or give up 98.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Bank of America vs. Innerscope Advertising Agency
Performance |
| Timeline |
| Bank of America |
| Innerscope Advertising |
Bank of America and Innerscope Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Innerscope Advertising
The main advantage of trading using opposite Bank of America and Innerscope Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Innerscope Advertising 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 Innerscope Advertising will offset losses from the drop in Innerscope Advertising's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Innerscope Advertising vs. CeCors Inc | Innerscope Advertising vs. GlucoTrack | Innerscope Advertising vs. Sharps Technology | Innerscope Advertising vs. Utah Medical Products |
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
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |