Correlation Between Bank of America and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Bank of America and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Bank of America and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Growth Strategy.
Diversification Opportunities for Bank of America and Growth Strategy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Growth is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Bank of America i.e., Bank of America and Growth Strategy go up and down completely randomly.
Pair Corralation between Bank of America and Growth Strategy
Considering the 90-day investment horizon Bank of America is expected to generate 1.1 times less return on investment than Growth Strategy. In addition to that, Bank of America is 1.97 times more volatile than Growth Strategy Fund. It trades about 0.09 of its total potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.19 per unit of volatility. If you would invest 1,261 in Growth Strategy Fund on November 5, 2024 and sell it today you would earn a total of 29.00 from holding Growth Strategy Fund or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Growth Strategy Fund
Performance |
| Timeline |
| Bank of America |
| Growth Strategy |
Bank of America and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Growth Strategy
The main advantage of trading using opposite Bank of America and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy'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 |
| Growth Strategy vs. Health Care Ultrasector | Growth Strategy vs. Eaton Vance Worldwide | Growth Strategy vs. Alphacentric Lifesci Healthcare | Growth Strategy vs. Highland Longshort Healthcare |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |