Correlation Between Bank of America and Kinea Securities
Can any of the company-specific risk be diversified away by investing in both Bank of America and Kinea Securities 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 Kinea Securities 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 Kinea Securities Fundo, you can compare the effects of market volatilities on Bank of America and Kinea Securities 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 Kinea Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Kinea Securities.
Diversification Opportunities for Bank of America and Kinea Securities
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Kinea is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Kinea Securities Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea Securities Fundo 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 Kinea Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea Securities Fundo has no effect on the direction of Bank of America i.e., Bank of America and Kinea Securities go up and down completely randomly.
Pair Corralation between Bank of America and Kinea Securities
Considering the 90-day investment horizon Bank of America is expected to generate 2.41 times more return on investment than Kinea Securities. However, Bank of America is 2.41 times more volatile than Kinea Securities Fundo. It trades about 0.27 of its potential returns per unit of risk. Kinea Securities Fundo is currently generating about -0.23 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% 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. Kinea Securities Fundo
Performance |
| Timeline |
| Bank of America |
| Kinea Securities Fundo |
Bank of America and Kinea Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Kinea Securities
The main advantage of trading using opposite Bank of America and Kinea Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Kinea Securities 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 Kinea Securities will offset losses from the drop in Kinea Securities' long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| Kinea Securities vs. Kinea Oportunidades Real | Kinea Securities vs. Kinea Indices Precos | Kinea Securities vs. Kinea Creditas Fundo | Kinea Securities vs. Kinea Renda Imobiliria |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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