Correlation Between Bank of America and Las Vegas
Can any of the company-specific risk be diversified away by investing in both Bank of America and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on Bank of America and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Las Vegas.
Diversification Opportunities for Bank of America and Las Vegas
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Las is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of Bank of America i.e., Bank of America and Las Vegas go up and down completely randomly.
Pair Corralation between Bank of America and Las Vegas
Considering the 90-day investment horizon Bank of America is expected to generate 2.14 times less return on investment than Las Vegas. But when comparing it to its historical volatility, Bank of America is 1.31 times less risky than Las Vegas. It trades about 0.1 of its potential returns per unit of risk. Las Vegas Sands is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 76,072 in Las Vegas Sands on September 3, 2024 and sell it today you would earn a total of 35,648 from holding Las Vegas Sands or generate 46.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank of America vs. Las Vegas Sands
Performance |
| Timeline |
| Bank of America |
| Las Vegas Sands |
Bank of America and Las Vegas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Las Vegas
The main advantage of trading using opposite Bank of America and Las Vegas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Las Vegas 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 Las Vegas will offset losses from the drop in Las Vegas' long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| Las Vegas vs. Southwest Airlines | Las Vegas vs. Hoteles City Express | Las Vegas vs. United Airlines Holdings | Las Vegas vs. DXC Technology |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |