Correlation Between Bank of America and NATIONAL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Bank of America and NATIONAL INVESTMENT 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 NATIONAL INVESTMENT 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 NATIONAL INVESTMENT TRUST, you can compare the effects of market volatilities on Bank of America and NATIONAL INVESTMENT 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 NATIONAL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NATIONAL INVESTMENT.
Diversification Opportunities for Bank of America and NATIONAL INVESTMENT
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and NATIONAL is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NATIONAL INVESTMENT TRUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL INVESTMENT TRUST 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 NATIONAL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL INVESTMENT TRUST has no effect on the direction of Bank of America i.e., Bank of America and NATIONAL INVESTMENT go up and down completely randomly.
Pair Corralation between Bank of America and NATIONAL INVESTMENT
Considering the 90-day investment horizon Bank of America is expected to generate 105.9 times more return on investment than NATIONAL INVESTMENT. However, Bank of America is 105.9 times more volatile than NATIONAL INVESTMENT TRUST. It trades about 0.27 of its potential returns per unit of risk. NATIONAL INVESTMENT TRUST is currently generating about -0.01 per unit of risk. If you would invest 4,253 in Bank of America on August 30, 2024 and sell it today you would earn a total of 524.00 from holding Bank of America or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bank of America vs. NATIONAL INVESTMENT TRUST
Performance |
| Timeline |
| Bank of America |
| NATIONAL INVESTMENT TRUST |
Bank of America and NATIONAL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and NATIONAL INVESTMENT
The main advantage of trading using opposite Bank of America and NATIONAL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, NATIONAL INVESTMENT 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 NATIONAL INVESTMENT will offset losses from the drop in NATIONAL INVESTMENT's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
| NATIONAL INVESTMENT vs. MALAWI PROPERTY INVESTMENT | NATIONAL INVESTMENT vs. BLANTYRE HOTELS LIMITED | NATIONAL INVESTMENT vs. NATIONAL BANK OF | NATIONAL INVESTMENT vs. FDH BANK PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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