Correlation Between Bank of America and Quantex Fund
Can any of the company-specific risk be diversified away by investing in both Bank of America and Quantex Fund 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 Quantex Fund 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 Quantex Fund Adviser, you can compare the effects of market volatilities on Bank of America and Quantex Fund 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 Quantex Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Quantex Fund.
Diversification Opportunities for Bank of America and Quantex Fund
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Quantex is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Quantex Fund Adviser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantex Fund Adviser 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 Quantex Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantex Fund Adviser has no effect on the direction of Bank of America i.e., Bank of America and Quantex Fund go up and down completely randomly.
Pair Corralation between Bank of America and Quantex Fund
Considering the 90-day investment horizon Bank of America is expected to generate 2.82 times more return on investment than Quantex Fund. However, Bank of America is 2.82 times more volatile than Quantex Fund Adviser. It trades about 0.27 of its potential returns per unit of risk. Quantex Fund Adviser is currently generating about 0.11 per unit of risk. If you would invest 4,262 in Bank of America on August 29, 2024 and sell it today you would earn a total of 513.00 from holding Bank of America or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Quantex Fund Adviser
Performance |
| Timeline |
| Bank of America |
| Quantex Fund Adviser |
Bank of America and Quantex Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Quantex Fund
The main advantage of trading using opposite Bank of America and Quantex Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Quantex Fund 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 Quantex Fund will offset losses from the drop in Quantex Fund's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Quantex Fund vs. Quantex Fund Retail | Quantex Fund vs. Nuveen Mid Cap | Quantex Fund vs. Bny Mellon Mid | Quantex Fund vs. Keeley Mid Cap |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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