Correlation Between Bank of America and Polen International
Can any of the company-specific risk be diversified away by investing in both Bank of America and Polen International 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 Polen International 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 Polen International Small, you can compare the effects of market volatilities on Bank of America and Polen International 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 Polen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Polen International.
Diversification Opportunities for Bank of America and Polen International
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Polen is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Polen International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen International Small 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 Polen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen International Small has no effect on the direction of Bank of America i.e., Bank of America and Polen International go up and down completely randomly.
Pair Corralation between Bank of America and Polen International
If you would invest 4,176 in Bank of America on September 2, 2024 and sell it today you would earn a total of 575.00 from holding Bank of America or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Bank of America vs. Polen International Small
Performance |
| Timeline |
| Bank of America |
| Polen International Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Polen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Polen International
The main advantage of trading using opposite Bank of America and Polen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Polen International 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 Polen International will offset losses from the drop in Polen International'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 |
| Polen International vs. Dws Government Money | Polen International vs. Virtus Seix Government | Polen International vs. John Hancock Government | Polen International vs. Us Government Securities |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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