Correlation Between Bank of America and Kjell Group
Can any of the company-specific risk be diversified away by investing in both Bank of America and Kjell Group 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 Kjell Group 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 Kjell Group AB, you can compare the effects of market volatilities on Bank of America and Kjell Group 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 Kjell Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Kjell Group.
Diversification Opportunities for Bank of America and Kjell Group
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Kjell is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Kjell Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kjell Group AB 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 Kjell Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kjell Group AB has no effect on the direction of Bank of America i.e., Bank of America and Kjell Group go up and down completely randomly.
Pair Corralation between Bank of America and Kjell Group
Considering the 90-day investment horizon Bank of America is expected to generate 0.65 times more return on investment than Kjell Group. However, Bank of America is 1.54 times less risky than Kjell Group. It trades about 0.31 of its potential returns per unit of risk. Kjell Group AB is currently generating about -0.33 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Bank of America vs. Kjell Group AB
Performance |
| Timeline |
| Bank of America |
| Kjell Group AB |
Bank of America and Kjell Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Kjell Group
The main advantage of trading using opposite Bank of America and Kjell Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Kjell Group 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 Kjell Group will offset losses from the drop in Kjell Group's long position.| Bank of America vs. Citigroup | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| Kjell Group vs. Clas Ohlson AB | Kjell Group vs. Ctek AB | Kjell Group vs. Truecaller AB | Kjell Group vs. Dustin Group AB |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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