Correlation Between Bank of America and QC Copper
Can any of the company-specific risk be diversified away by investing in both Bank of America and QC 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 QC 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 QC Copper and, you can compare the effects of market volatilities on Bank of America and QC 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 QC Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and QC Copper.
Diversification Opportunities for Bank of America and QC Copper
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and QCCU is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and QC Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QC Copper 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 QC Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QC Copper has no effect on the direction of Bank of America i.e., Bank of America and QC Copper go up and down completely randomly.
Pair Corralation between Bank of America and QC Copper
Considering the 90-day investment horizon Bank of America is expected to generate 0.46 times more return on investment than QC Copper. However, Bank of America is 2.18 times less risky than QC Copper. It trades about 0.31 of its potential returns per unit of risk. QC Copper and is currently generating about -0.06 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. QC Copper and
Performance |
| Timeline |
| Bank of America |
| QC Copper |
Bank of America and QC Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and QC Copper
The main advantage of trading using opposite Bank of America and QC Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, QC 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 QC Copper will offset losses from the drop in QC Copper's long position.| Bank of America vs. Citigroup | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| QC Copper vs. First Majestic Silver | QC Copper vs. Ivanhoe Energy | QC Copper vs. Orezone Gold Corp | QC Copper vs. Faraday Copper 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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