Correlation Between Bank of America and Jhancock Multi-index
Can any of the company-specific risk be diversified away by investing in both Bank of America and Jhancock Multi-index 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 Jhancock Multi-index 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 Jhancock Multi Index 2065, you can compare the effects of market volatilities on Bank of America and Jhancock Multi-index 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 Jhancock Multi-index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Jhancock Multi-index.
Diversification Opportunities for Bank of America and Jhancock Multi-index
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Jhancock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Jhancock Multi Index 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multi Index 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 Jhancock Multi-index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multi Index has no effect on the direction of Bank of America i.e., Bank of America and Jhancock Multi-index go up and down completely randomly.
Pair Corralation between Bank of America and Jhancock Multi-index
Considering the 90-day investment horizon Bank of America is expected to generate 2.05 times more return on investment than Jhancock Multi-index. However, Bank of America is 2.05 times more volatile than Jhancock Multi Index 2065. It trades about 0.1 of its potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.1 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 805.00 from holding Bank of America or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Jhancock Multi Index 2065
Performance |
| Timeline |
| Bank of America |
| Jhancock Multi Index |
Bank of America and Jhancock Multi-index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Jhancock Multi-index
The main advantage of trading using opposite Bank of America and Jhancock Multi-index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Jhancock Multi-index 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 Jhancock Multi-index will offset losses from the drop in Jhancock Multi-index'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 |
| Jhancock Multi-index vs. Vanguard Target Retirement | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 | Jhancock Multi-index vs. American Funds 2065 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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