Correlation Between Bank of America and Orezone Gold
Can any of the company-specific risk be diversified away by investing in both Bank of America and Orezone Gold 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 Orezone Gold 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 Orezone Gold Corp, you can compare the effects of market volatilities on Bank of America and Orezone Gold 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 Orezone Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Orezone Gold.
Diversification Opportunities for Bank of America and Orezone Gold
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Orezone is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Orezone Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orezone Gold 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 Orezone Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orezone Gold Corp has no effect on the direction of Bank of America i.e., Bank of America and Orezone Gold go up and down completely randomly.
Pair Corralation between Bank of America and Orezone Gold
Considering the 90-day investment horizon Bank of America is expected to generate 0.42 times more return on investment than Orezone Gold. However, Bank of America is 2.4 times less risky than Orezone Gold. It trades about 0.18 of its potential returns per unit of risk. Orezone Gold Corp is currently generating about -0.02 per unit of risk. If you would invest 3,991 in Bank of America on August 29, 2024 and sell it today you would earn a total of 784.00 from holding Bank of America or generate 19.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Bank of America vs. Orezone Gold Corp
Performance |
| Timeline |
| Bank of America |
| Orezone Gold Corp |
Bank of America and Orezone Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Orezone Gold
The main advantage of trading using opposite Bank of America and Orezone Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Orezone Gold 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 Orezone Gold will offset losses from the drop in Orezone Gold'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 |
| Orezone Gold vs. i 80 Gold Corp | Orezone Gold vs. Perseus Mining | Orezone Gold vs. K92 Mining | Orezone Gold vs. GoGold 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Transaction History View history of all your transactions and understand their impact on performance |