Correlation Between Bank of America and Aquila Tax
Can any of the company-specific risk be diversified away by investing in both Bank of America and Aquila Tax 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 Aquila Tax 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 Aquila Tax Free Trust, you can compare the effects of market volatilities on Bank of America and Aquila Tax 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 Aquila Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Aquila Tax.
Diversification Opportunities for Bank of America and Aquila Tax
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Aquila is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Aquila Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free 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 Aquila Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of Bank of America i.e., Bank of America and Aquila Tax go up and down completely randomly.
Pair Corralation between Bank of America and Aquila Tax
If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bank of America vs. Aquila Tax Free Trust
Performance |
| Timeline |
| Bank of America |
| Aquila Tax Free |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Aquila Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Aquila Tax
The main advantage of trading using opposite Bank of America and Aquila Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Aquila Tax 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 Aquila Tax will offset losses from the drop in Aquila Tax's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Aquila Tax vs. Invesco Technology Fund | Aquila Tax vs. Biotechnology Ultrasector Profund | Aquila Tax vs. Technology Ultrasector Profund | Aquila Tax vs. Blackrock Science Technology |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |