Correlation Between Bank of America and Intech Us
Can any of the company-specific risk be diversified away by investing in both Bank of America and Intech Us 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 Intech Us 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 Intech Managed Volatility, you can compare the effects of market volatilities on Bank of America and Intech Us 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 Intech Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Intech Us.
Diversification Opportunities for Bank of America and Intech Us
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Intech is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Intech Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intech Managed Volatility 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 Intech Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intech Managed Volatility has no effect on the direction of Bank of America i.e., Bank of America and Intech Us go up and down completely randomly.
Pair Corralation between Bank of America and Intech Us
Considering the 90-day investment horizon Bank of America is expected to under-perform the Intech Us. In addition to that, Bank of America is 1.31 times more volatile than Intech Managed Volatility. It trades about -0.36 of its total potential returns per unit of risk. Intech Managed Volatility is currently generating about -0.05 per unit of volatility. If you would invest 1,211 in Intech Managed Volatility on November 28, 2024 and sell it today you would lose (9.00) from holding Intech Managed Volatility or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Intech Managed Volatility
Performance |
| Timeline |
| Bank of America |
| Intech Managed Volatility |
Bank of America and Intech Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Intech Us
The main advantage of trading using opposite Bank of America and Intech Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Intech Us 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 Intech Us will offset losses from the drop in Intech Us' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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