Correlation Between Bank of America and Janus Forty
Can any of the company-specific risk be diversified away by investing in both Bank of America and Janus Forty 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 Janus Forty 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 Janus Forty Fund, you can compare the effects of market volatilities on Bank of America and Janus Forty 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 Janus Forty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Janus Forty.
Diversification Opportunities for Bank of America and Janus Forty
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Janus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Janus Forty Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Janus Forty Fund 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 Janus Forty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Janus Forty Fund has no effect on the direction of Bank of America i.e., Bank of America and Janus Forty go up and down completely randomly.
Pair Corralation between Bank of America and Janus Forty
Considering the 90-day investment horizon Bank of America is expected to generate 1.88 times more return on investment than Janus Forty. However, Bank of America is 1.88 times more volatile than Janus Forty Fund. It trades about 0.27 of its potential returns per unit of risk. Janus Forty Fund is currently generating about 0.07 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank of America vs. Janus Forty Fund
Performance |
| Timeline |
| Bank of America |
| Janus Forty Fund |
Bank of America and Janus Forty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Janus Forty
The main advantage of trading using opposite Bank of America and Janus Forty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Janus Forty 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 Janus Forty will offset losses from the drop in Janus Forty's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| Janus Forty vs. Janus Forty Fund | Janus Forty vs. Janus Research Fund | Janus Forty vs. Brown Advisory Sustainable | Janus Forty vs. Janus Venture Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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