Correlation Between Bank of America and JCK International
Can any of the company-specific risk be diversified away by investing in both Bank of America and JCK International 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 JCK International 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 JCK International Public, you can compare the effects of market volatilities on Bank of America and JCK International 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 JCK International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and JCK International.
Diversification Opportunities for Bank of America and JCK International
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and JCK is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and JCK International Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCK International Public 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 JCK International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCK International Public has no effect on the direction of Bank of America i.e., Bank of America and JCK International go up and down completely randomly.
Pair Corralation between Bank of America and JCK International
Considering the 90-day investment horizon Bank of America is expected to generate 34.42 times less return on investment than JCK International. But when comparing it to its historical volatility, Bank of America is 55.91 times less risky than JCK International. It trades about 0.12 of its potential returns per unit of risk. JCK International Public is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 35.00 in JCK International Public on September 3, 2024 and sell it today you would lose (11.00) from holding JCK International Public or give up 31.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.95% |
| Values | Daily Returns |
Bank of America vs. JCK International Public
Performance |
| Timeline |
| Bank of America |
| JCK International Public |
Bank of America and JCK International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and JCK International
The main advantage of trading using opposite Bank of America and JCK International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, JCK International 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 JCK International will offset losses from the drop in JCK International'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 |
| JCK International vs. JAS Asset PCL | JCK International vs. Country Group Development | JCK International vs. Everland Public | JCK International vs. Bangkok Land Public |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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