Correlation Between Bank of America and Kesla Oyj
Can any of the company-specific risk be diversified away by investing in both Bank of America and Kesla Oyj 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 Kesla Oyj 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 Kesla Oyj A, you can compare the effects of market volatilities on Bank of America and Kesla Oyj 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 Kesla Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Kesla Oyj.
Diversification Opportunities for Bank of America and Kesla Oyj
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Kesla is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Kesla Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesla Oyj A 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 Kesla Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesla Oyj A has no effect on the direction of Bank of America i.e., Bank of America and Kesla Oyj go up and down completely randomly.
Pair Corralation between Bank of America and Kesla Oyj
Considering the 90-day investment horizon Bank of America is expected to generate 0.84 times more return on investment than Kesla Oyj. However, Bank of America is 1.19 times less risky than Kesla Oyj. It trades about 0.1 of its potential returns per unit of risk. Kesla Oyj A is currently generating about -0.02 per unit of risk. If you would invest 3,938 in Bank of America on September 1, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 96.92% |
| Values | Daily Returns |
Bank of America vs. Kesla Oyj A
Performance |
| Timeline |
| Bank of America |
| Kesla Oyj A |
Bank of America and Kesla Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Kesla Oyj
The main advantage of trading using opposite Bank of America and Kesla Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Kesla Oyj 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 Kesla Oyj will offset losses from the drop in Kesla Oyj's 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 |
| Kesla Oyj vs. Honkarakenne Oyj B | Kesla Oyj vs. Innofactor Oyj | Kesla Oyj vs. Raute Oyj | Kesla Oyj vs. Exel Composites Oyj |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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