Correlation Between Bank of America and KSM Mutual
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By analyzing existing cross correlation between Bank of America and KSM Mutual Funds, you can compare the effects of market volatilities on Bank of America and KSM Mutual 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 KSM Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and KSM Mutual.
Diversification Opportunities for Bank of America and KSM Mutual
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and KSM is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and KSM Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSM Mutual Funds 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 KSM Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSM Mutual Funds has no effect on the direction of Bank of America i.e., Bank of America and KSM Mutual go up and down completely randomly.
Pair Corralation between Bank of America and KSM Mutual
Considering the 90-day investment horizon Bank of America is expected to generate 1.56 times more return on investment than KSM Mutual. However, Bank of America is 1.56 times more volatile than KSM Mutual Funds. It trades about 0.14 of its potential returns per unit of risk. KSM Mutual Funds is currently generating about 0.05 per unit of risk. If you would invest 2,756 in Bank of America on September 1, 2024 and sell it today you would earn a total of 1,995 from holding Bank of America or generate 72.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.7% |
| Values | Daily Returns |
Bank of America vs. KSM Mutual Funds
Performance |
| Timeline |
| Bank of America |
| KSM Mutual Funds |
Bank of America and KSM Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and KSM Mutual
The main advantage of trading using opposite Bank of America and KSM Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, KSM Mutual 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 KSM Mutual will offset losses from the drop in KSM Mutual'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 |
| KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds | KSM Mutual vs. KSM Mutual Funds |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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