Correlation Between Bank of America and Oppenheimer Roc
Can any of the company-specific risk be diversified away by investing in both Bank of America and Oppenheimer Roc 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 Oppenheimer Roc 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 Oppenheimer Roc High, you can compare the effects of market volatilities on Bank of America and Oppenheimer Roc 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 Oppenheimer Roc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Oppenheimer Roc.
Diversification Opportunities for Bank of America and Oppenheimer Roc
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Oppenheimer is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Oppenheimer Roc High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Roc High 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 Oppenheimer Roc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Roc High has no effect on the direction of Bank of America i.e., Bank of America and Oppenheimer Roc go up and down completely randomly.
Pair Corralation between Bank of America and Oppenheimer Roc
Considering the 90-day investment horizon Bank of America is expected to generate 5.02 times more return on investment than Oppenheimer Roc. However, Bank of America is 5.02 times more volatile than Oppenheimer Roc High. It trades about 0.13 of its potential returns per unit of risk. Oppenheimer Roc High is currently generating about 0.1 per unit of risk. If you would invest 3,007 in Bank of America on September 2, 2024 and sell it today you would earn a total of 1,744 from holding Bank of America or generate 58.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Oppenheimer Roc High
Performance |
| Timeline |
| Bank of America |
| Oppenheimer Roc High |
Bank of America and Oppenheimer Roc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Oppenheimer Roc
The main advantage of trading using opposite Bank of America and Oppenheimer Roc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Oppenheimer Roc 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 Oppenheimer Roc will offset losses from the drop in Oppenheimer Roc'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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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