Correlation Between Bank of America and Listed Funds
Can any of the company-specific risk be diversified away by investing in both Bank of America and Listed Funds 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 Listed Funds 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 Listed Funds Trust, you can compare the effects of market volatilities on Bank of America and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Listed Funds.
Diversification Opportunities for Bank of America and Listed Funds
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Listed is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Bank of America i.e., Bank of America and Listed Funds go up and down completely randomly.
Pair Corralation between Bank of America and Listed Funds
Considering the 90-day investment horizon Bank of America is expected to generate 5.57 times more return on investment than Listed Funds. However, Bank of America is 5.57 times more volatile than Listed Funds Trust. It trades about 0.12 of its potential returns per unit of risk. Listed Funds Trust is currently generating about 0.13 per unit of risk. If you would invest 3,335 in Bank of America on August 28, 2024 and sell it today you would earn a total of 1,415 from holding Bank of America or generate 42.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Bank of America vs. Listed Funds Trust
Performance |
| Timeline |
| Bank of America |
| Listed Funds Trust |
Bank of America and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Listed Funds
The main advantage of trading using opposite Bank of America and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| Listed Funds vs. Dimensional ETF Trust | Listed Funds vs. Dimensional ETF Trust | Listed Funds vs. Dimensional Core Equity | Listed Funds vs. Dimensional ETF Trust |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets |