Correlation Between Bank of America and Ismailia Misr
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ismailia Misr 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 Ismailia Misr 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 Ismailia Misr Poultry, you can compare the effects of market volatilities on Bank of America and Ismailia Misr 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 Ismailia Misr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ismailia Misr.
Diversification Opportunities for Bank of America and Ismailia Misr
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Ismailia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ismailia Misr Poultry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ismailia Misr Poultry 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 Ismailia Misr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ismailia Misr Poultry has no effect on the direction of Bank of America i.e., Bank of America and Ismailia Misr go up and down completely randomly.
Pair Corralation between Bank of America and Ismailia Misr
Considering the 90-day investment horizon Bank of America is expected to generate 4.05 times less return on investment than Ismailia Misr. But when comparing it to its historical volatility, Bank of America is 2.82 times less risky than Ismailia Misr. It trades about 0.26 of its potential returns per unit of risk. Ismailia Misr Poultry is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 808.00 in Ismailia Misr Poultry on October 29, 2024 and sell it today you would earn a total of 169.00 from holding Ismailia Misr Poultry or generate 20.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 83.33% |
| Values | Daily Returns |
Bank of America vs. Ismailia Misr Poultry
Performance |
| Timeline |
| Bank of America |
| Ismailia Misr Poultry |
Bank of America and Ismailia Misr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ismailia Misr
The main advantage of trading using opposite Bank of America and Ismailia Misr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ismailia Misr 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 Ismailia Misr will offset losses from the drop in Ismailia Misr's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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