Correlation Between Bank of America and Maxeon Solar
Can any of the company-specific risk be diversified away by investing in both Bank of America and Maxeon Solar 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 Maxeon Solar 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 Maxeon Solar Technologies, you can compare the effects of market volatilities on Bank of America and Maxeon Solar 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 Maxeon Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Maxeon Solar.
Diversification Opportunities for Bank of America and Maxeon Solar
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Maxeon is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Maxeon Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxeon Solar Technologies 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 Maxeon Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxeon Solar Technologies has no effect on the direction of Bank of America i.e., Bank of America and Maxeon Solar go up and down completely randomly.
Pair Corralation between Bank of America and Maxeon Solar
Considering the 90-day investment horizon Bank of America is expected to generate 3.7 times less return on investment than Maxeon Solar. But when comparing it to its historical volatility, Bank of America is 7.21 times less risky than Maxeon Solar. It trades about 0.26 of its potential returns per unit of risk. Maxeon Solar Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 647.00 in Maxeon Solar Technologies on August 28, 2024 and sell it today you would earn a total of 151.00 from holding Maxeon Solar Technologies or generate 23.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Maxeon Solar Technologies
Performance |
| Timeline |
| Bank of America |
| Maxeon Solar Technologies |
Bank of America and Maxeon Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Maxeon Solar
The main advantage of trading using opposite Bank of America and Maxeon Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Maxeon Solar 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 Maxeon Solar will offset losses from the drop in Maxeon Solar's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| Maxeon Solar vs. Sunrun Inc | Maxeon Solar vs. Canadian Solar | Maxeon Solar vs. First Solar | Maxeon Solar vs. Sunnova Energy International |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |