Correlation Between Bank of America and Protagonist Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bank of America and Protagonist Therapeutics 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 Protagonist Therapeutics 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 Protagonist Therapeutics, you can compare the effects of market volatilities on Bank of America and Protagonist Therapeutics 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 Protagonist Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Protagonist Therapeutics.
Diversification Opportunities for Bank of America and Protagonist Therapeutics
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Protagonist is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Protagonist Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagonist Therapeutics 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 Protagonist Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagonist Therapeutics has no effect on the direction of Bank of America i.e., Bank of America and Protagonist Therapeutics go up and down completely randomly.
Pair Corralation between Bank of America and Protagonist Therapeutics
Considering the 90-day investment horizon Bank of America is expected to generate 1.86 times less return on investment than Protagonist Therapeutics. But when comparing it to its historical volatility, Bank of America is 2.15 times less risky than Protagonist Therapeutics. It trades about 0.12 of its potential returns per unit of risk. Protagonist Therapeutics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,501 in Protagonist Therapeutics on August 28, 2024 and sell it today you would earn a total of 2,052 from holding Protagonist Therapeutics or generate 82.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Protagonist Therapeutics
Performance |
| Timeline |
| Bank of America |
| Protagonist Therapeutics |
Bank of America and Protagonist Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Protagonist Therapeutics
The main advantage of trading using opposite Bank of America and Protagonist Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Protagonist Therapeutics 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 Protagonist Therapeutics will offset losses from the drop in Protagonist Therapeutics' 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 |
| Protagonist Therapeutics vs. Eliem Therapeutics | Protagonist Therapeutics vs. HCW Biologics | Protagonist Therapeutics vs. Scpharmaceuticals | Protagonist Therapeutics vs. Milestone Pharmaceuticals |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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