Correlation Between Bank of America and Project Energy
Can any of the company-specific risk be diversified away by investing in both Bank of America and Project Energy 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 Project Energy 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 Project Energy Reimagined, you can compare the effects of market volatilities on Bank of America and Project Energy 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 Project Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Project Energy.
Diversification Opportunities for Bank of America and Project Energy
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Project is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Project Energy Reimagined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Project Energy Reimagined 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 Project Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Project Energy Reimagined has no effect on the direction of Bank of America i.e., Bank of America and Project Energy go up and down completely randomly.
Pair Corralation between Bank of America and Project Energy
Considering the 90-day investment horizon Bank of America is expected to generate 0.09 times more return on investment than Project Energy. However, Bank of America is 11.63 times less risky than Project Energy. It trades about 0.1 of its potential returns per unit of risk. Project Energy Reimagined is currently generating about -0.19 per unit of risk. If you would invest 3,938 in Bank of America on September 1, 2024 and sell it today you would earn a total of 813.00 from holding Bank of America or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 35.71% |
| Values | Daily Returns |
Bank of America vs. Project Energy Reimagined
Performance |
| Timeline |
| Bank of America |
| Project Energy Reimagined |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Project Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Project Energy
The main advantage of trading using opposite Bank of America and Project Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Project Energy 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 Project Energy will offset losses from the drop in Project Energy'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 |
| Project Energy vs. Portage Fintech Acquisition | Project Energy vs. Swiftmerge Acquisition Corp | Project Energy vs. Four Leaf Acquisition | Project Energy vs. IX Acquisition Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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