Correlation Between Bank of America and Milton
Can any of the company-specific risk be diversified away by investing in both Bank of America and Milton 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 Milton 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 Milton Limited, you can compare the effects of market volatilities on Bank of America and Milton 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 Milton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Milton.
Diversification Opportunities for Bank of America and Milton
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Milton is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Milton Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Milton Limited 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 Milton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Milton Limited has no effect on the direction of Bank of America i.e., Bank of America and Milton go up and down completely randomly.
Pair Corralation between Bank of America and Milton
If you would invest 0.00 in Milton Limited on January 6, 2025 and sell it today you would earn a total of 0.00 from holding Milton Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bank of America vs. Milton Limited
Performance |
| Timeline |
| Bank of America |
| Milton Limited |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Bank of America and Milton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Milton
The main advantage of trading using opposite Bank of America and Milton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Milton 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 Milton will offset losses from the drop in Milton's long position.| Bank of America vs. Barclays PLC ADR | Bank of America vs. ING Group NV | Bank of America vs. Banco Santander SA | Bank of America vs. HSBC Holdings PLC |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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