Correlation Between Bank of America and MeguREIT Israel
Can any of the company-specific risk be diversified away by investing in both Bank of America and MeguREIT Israel 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 MeguREIT Israel 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 MeguREIT Israel, you can compare the effects of market volatilities on Bank of America and MeguREIT Israel 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 MeguREIT Israel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and MeguREIT Israel.
Diversification Opportunities for Bank of America and MeguREIT Israel
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and MeguREIT is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and MeguREIT Israel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MeguREIT Israel 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 MeguREIT Israel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MeguREIT Israel has no effect on the direction of Bank of America i.e., Bank of America and MeguREIT Israel go up and down completely randomly.
Pair Corralation between Bank of America and MeguREIT Israel
Considering the 90-day investment horizon Bank of America is expected to generate 2.44 times less return on investment than MeguREIT Israel. But when comparing it to its historical volatility, Bank of America is 1.58 times less risky than MeguREIT Israel. It trades about 0.11 of its potential returns per unit of risk. MeguREIT Israel is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 38,252 in MeguREIT Israel on August 29, 2024 and sell it today you would earn a total of 15,748 from holding MeguREIT Israel or generate 41.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 74.4% |
| Values | Daily Returns |
Bank of America vs. MeguREIT Israel
Performance |
| Timeline |
| Bank of America |
| MeguREIT Israel |
Bank of America and MeguREIT Israel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and MeguREIT Israel
The main advantage of trading using opposite Bank of America and MeguREIT Israel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, MeguREIT Israel 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 MeguREIT Israel will offset losses from the drop in MeguREIT Israel's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| MeguREIT Israel vs. Nice | MeguREIT Israel vs. The Gold Bond | MeguREIT Israel vs. Bank Leumi Le Israel | MeguREIT Israel vs. ICL Israel Chemicals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |