Correlation Between Bank of America and Moringa Acquisition
Can any of the company-specific risk be diversified away by investing in both Bank of America and Moringa Acquisition 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 Moringa Acquisition 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 Moringa Acquisition Corp, you can compare the effects of market volatilities on Bank of America and Moringa Acquisition 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 Moringa Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Moringa Acquisition.
Diversification Opportunities for Bank of America and Moringa Acquisition
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Moringa is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Moringa Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moringa Acquisition Corp 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 Moringa Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moringa Acquisition Corp has no effect on the direction of Bank of America i.e., Bank of America and Moringa Acquisition go up and down completely randomly.
Pair Corralation between Bank of America and Moringa Acquisition
Considering the 90-day investment horizon Bank of America is expected to generate 191.05 times less return on investment than Moringa Acquisition. But when comparing it to its historical volatility, Bank of America is 80.14 times less risky than Moringa Acquisition. It trades about 0.05 of its potential returns per unit of risk. Moringa Acquisition Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3.60 in Moringa Acquisition Corp on August 24, 2024 and sell it today you would lose (3.60) from holding Moringa Acquisition Corp or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 43.15% |
| Values | Daily Returns |
Bank of America vs. Moringa Acquisition Corp
Performance |
| Timeline |
| Bank of America |
| Moringa Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Moringa Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Moringa Acquisition
The main advantage of trading using opposite Bank of America and Moringa Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Moringa Acquisition 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 Moringa Acquisition will offset losses from the drop in Moringa Acquisition's long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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