Correlation Between Bank of America and Newport Logastica
Can any of the company-specific risk be diversified away by investing in both Bank of America and Newport Logastica 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 Newport Logastica 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 Newport Logastica Fundo, you can compare the effects of market volatilities on Bank of America and Newport Logastica 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 Newport Logastica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Newport Logastica.
Diversification Opportunities for Bank of America and Newport Logastica
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Newport is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Newport Logastica Fundo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newport Logastica Fundo 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 Newport Logastica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newport Logastica Fundo has no effect on the direction of Bank of America i.e., Bank of America and Newport Logastica go up and down completely randomly.
Pair Corralation between Bank of America and Newport Logastica
Considering the 90-day investment horizon Bank of America is expected to generate 0.84 times more return on investment than Newport Logastica. However, Bank of America is 1.19 times less risky than Newport Logastica. It trades about 0.14 of its potential returns per unit of risk. Newport Logastica Fundo is currently generating about -0.17 per unit of risk. If you would invest 4,481 in Bank of America on November 4, 2024 and sell it today you would earn a total of 149.00 from holding Bank of America or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. Newport Logastica Fundo
Performance |
| Timeline |
| Bank of America |
| Newport Logastica Fundo |
Bank of America and Newport Logastica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Newport Logastica
The main advantage of trading using opposite Bank of America and Newport Logastica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Newport Logastica 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 Newport Logastica will offset losses from the drop in Newport Logastica's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Canadian Imperial Bank |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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