Correlation Between Bank of America and Nevada Copper
Can any of the company-specific risk be diversified away by investing in both Bank of America and Nevada Copper 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 Nevada Copper 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 Nevada Copper Corp, you can compare the effects of market volatilities on Bank of America and Nevada Copper 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 Nevada Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nevada Copper.
Diversification Opportunities for Bank of America and Nevada Copper
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Nevada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nevada Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada Copper 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 Nevada Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada Copper Corp has no effect on the direction of Bank of America i.e., Bank of America and Nevada Copper go up and down completely randomly.
Pair Corralation between Bank of America and Nevada Copper
If you would invest 2,660 in Bank of America on November 27, 2024 and sell it today you would earn a total of 1,786 from holding Bank of America or generate 67.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bank of America vs. Nevada Copper Corp
Performance |
| Timeline |
| Bank of America |
| Nevada Copper Corp |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Bank of America and Nevada Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nevada Copper
The main advantage of trading using opposite Bank of America and Nevada Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nevada Copper 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 Nevada Copper will offset losses from the drop in Nevada Copper's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Nevada Copper vs. Ero Copper Corp | Nevada Copper vs. Copperbank Resources Corp | Nevada Copper vs. Copper Mountain Mining | Nevada Copper vs. CopperCorp Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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