Correlation Between Bank of America and NSAV Holding
Can any of the company-specific risk be diversified away by investing in both Bank of America and NSAV Holding 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 NSAV Holding 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 NSAV Holding, you can compare the effects of market volatilities on Bank of America and NSAV Holding 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 NSAV Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and NSAV Holding.
Diversification Opportunities for Bank of America and NSAV Holding
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and NSAV is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and NSAV Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSAV Holding 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 NSAV Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSAV Holding has no effect on the direction of Bank of America i.e., Bank of America and NSAV Holding go up and down completely randomly.
Pair Corralation between Bank of America and NSAV Holding
Considering the 90-day investment horizon Bank of America is expected to generate 6.49 times less return on investment than NSAV Holding. But when comparing it to its historical volatility, Bank of America is 9.63 times less risky than NSAV Holding. It trades about 0.06 of its potential returns per unit of risk. NSAV Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.29 in NSAV Holding on August 30, 2024 and sell it today you would lose (0.21) from holding NSAV Holding or give up 72.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. NSAV Holding
Performance |
| Timeline |
| Bank of America |
| NSAV Holding |
Bank of America and NSAV Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and NSAV Holding
The main advantage of trading using opposite Bank of America and NSAV Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, NSAV Holding 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 NSAV Holding will offset losses from the drop in NSAV Holding'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. JPMorgan Chase Co |
| NSAV Holding vs. GiveMePower Corp | NSAV Holding vs. Axis Technologies Group | NSAV Holding vs. Vortex Brands Co | NSAV Holding vs. Sysorex |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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