Correlation Between Bank of America and Groupe Partouche
Can any of the company-specific risk be diversified away by investing in both Bank of America and Groupe Partouche 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 Groupe Partouche 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 Groupe Partouche SA, you can compare the effects of market volatilities on Bank of America and Groupe Partouche 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 Groupe Partouche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Groupe Partouche.
Diversification Opportunities for Bank of America and Groupe Partouche
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Groupe is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Groupe Partouche SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groupe Partouche 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 Groupe Partouche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groupe Partouche has no effect on the direction of Bank of America i.e., Bank of America and Groupe Partouche go up and down completely randomly.
Pair Corralation between Bank of America and Groupe Partouche
Considering the 90-day investment horizon Bank of America is expected to generate 0.97 times more return on investment than Groupe Partouche. However, Bank of America is 1.03 times less risky than Groupe Partouche. It trades about 0.08 of its potential returns per unit of risk. Groupe Partouche SA is currently generating about -0.01 per unit of risk. If you would invest 2,660 in Bank of America on November 27, 2024 and sell it today you would earn a total of 1,786 from holding Bank of America or generate 67.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.13% |
| Values | Daily Returns |
Bank of America vs. Groupe Partouche SA
Performance |
| Timeline |
| Bank of America |
| Groupe Partouche |
Bank of America and Groupe Partouche Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Groupe Partouche
The main advantage of trading using opposite Bank of America and Groupe Partouche positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Groupe Partouche 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 Groupe Partouche will offset losses from the drop in Groupe Partouche'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. Royal Bank of |
| Groupe Partouche vs. Passat Socit Anonyme | Groupe Partouche vs. Plastiques du Val | Groupe Partouche vs. NRJ Group | Groupe Partouche vs. Haulotte Group SA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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