Correlation Between Bank of America and Exchange Traded
Can any of the company-specific risk be diversified away by investing in both Bank of America and Exchange Traded 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 Exchange Traded 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 Exchange Traded Concepts, you can compare the effects of market volatilities on Bank of America and Exchange Traded 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 Exchange Traded. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Exchange Traded.
Diversification Opportunities for Bank of America and Exchange Traded
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Exchange is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Exchange Traded Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Traded Concepts 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 Exchange Traded. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Traded Concepts has no effect on the direction of Bank of America i.e., Bank of America and Exchange Traded go up and down completely randomly.
Pair Corralation between Bank of America and Exchange Traded
If you would invest 3,938 in Bank of America on September 1, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
Bank of America vs. Exchange Traded Concepts
Performance |
| Timeline |
| Bank of America |
| Exchange Traded Concepts |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Exchange Traded Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Exchange Traded
The main advantage of trading using opposite Bank of America and Exchange Traded positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Exchange Traded 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 Exchange Traded will offset losses from the drop in Exchange Traded's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Exchange Traded vs. QRAFT AI Enhanced Large | Exchange Traded vs. QRAFT AI Enhanced Large | Exchange Traded vs. Invesco SP 500 | Exchange Traded vs. TrueShares Technology AI |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |