Correlation Between Bank of America and Retirement Choices
Can any of the company-specific risk be diversified away by investing in both Bank of America and Retirement Choices 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 Retirement Choices 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 Retirement Choices At, you can compare the effects of market volatilities on Bank of America and Retirement Choices 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 Retirement Choices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Retirement Choices.
Diversification Opportunities for Bank of America and Retirement Choices
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Retirement is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Retirement Choices At in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retirement Choices 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 Retirement Choices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retirement Choices has no effect on the direction of Bank of America i.e., Bank of America and Retirement Choices go up and down completely randomly.
Pair Corralation between Bank of America and Retirement Choices
If you would invest 3,007 in Bank of America on September 2, 2024 and sell it today you would earn a total of 1,744 from holding Bank of America or generate 58.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Bank of America vs. Retirement Choices At
Performance |
| Timeline |
| Bank of America |
| Retirement Choices |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Retirement Choices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Retirement Choices
The main advantage of trading using opposite Bank of America and Retirement Choices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Retirement Choices 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 Retirement Choices will offset losses from the drop in Retirement Choices' long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Retirement Choices vs. Tax Managed Large Cap | Retirement Choices vs. Large Cap Growth Profund | Retirement Choices vs. Touchstone Large Cap | Retirement Choices vs. American Mutual 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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