Correlation Between Bank of America and Chakana Copper
Can any of the company-specific risk be diversified away by investing in both Bank of America and Chakana Copper 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 Chakana Copper 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 Chakana Copper Corp, you can compare the effects of market volatilities on Bank of America and Chakana Copper 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 Chakana Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Chakana Copper.
Diversification Opportunities for Bank of America and Chakana Copper
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Chakana is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Chakana Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chakana Copper Corp 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 Chakana Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chakana Copper Corp has no effect on the direction of Bank of America i.e., Bank of America and Chakana Copper go up and down completely randomly.
Pair Corralation between Bank of America and Chakana Copper
Considering the 90-day investment horizon Bank of America is expected to generate 0.1 times more return on investment than Chakana Copper. However, Bank of America is 10.33 times less risky than Chakana Copper. It trades about 0.14 of its potential returns per unit of risk. Chakana Copper Corp is currently generating about -0.12 per unit of risk. If you would invest 4,481 in Bank of America on November 4, 2024 and sell it today you would earn a total of 149.00 from holding Bank of America or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Bank of America vs. Chakana Copper Corp
Performance |
| Timeline |
| Bank of America |
| Chakana Copper Corp |
Bank of America and Chakana Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Chakana Copper
The main advantage of trading using opposite Bank of America and Chakana Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Chakana Copper 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 Chakana Copper will offset losses from the drop in Chakana Copper's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Canadian Imperial Bank |
| Chakana Copper vs. Libero Copper Corp | Chakana Copper vs. Scottie Resources Corp | Chakana Copper vs. PJX Resources | Chakana Copper vs. Rugby Mining Limited |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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