Correlation Between Bank of America and REGAL HOTEL
Can any of the company-specific risk be diversified away by investing in both Bank of America and REGAL HOTEL 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 REGAL HOTEL 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 REGAL HOTEL INTL, you can compare the effects of market volatilities on Bank of America and REGAL HOTEL 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 REGAL HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and REGAL HOTEL.
Diversification Opportunities for Bank of America and REGAL HOTEL
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and REGAL is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and REGAL HOTEL INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL HOTEL INTL 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 REGAL HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL HOTEL INTL has no effect on the direction of Bank of America i.e., Bank of America and REGAL HOTEL go up and down completely randomly.
Pair Corralation between Bank of America and REGAL HOTEL
Considering the 90-day investment horizon Bank of America is expected to generate 0.78 times more return on investment than REGAL HOTEL. However, Bank of America is 1.28 times less risky than REGAL HOTEL. It trades about 0.1 of its potential returns per unit of risk. REGAL HOTEL INTL is currently generating about -0.02 per unit of risk. If you would invest 4,238 in Bank of America on October 26, 2024 and sell it today you would earn a total of 401.00 from holding Bank of America or generate 9.46% 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. REGAL HOTEL INTL
Performance |
| Timeline |
| Bank of America |
| REGAL HOTEL INTL |
Bank of America and REGAL HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and REGAL HOTEL
The main advantage of trading using opposite Bank of America and REGAL HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, REGAL HOTEL 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 REGAL HOTEL will offset losses from the drop in REGAL HOTEL's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC |
| REGAL HOTEL vs. Boyd Gaming | REGAL HOTEL vs. FUYO GENERAL LEASE | REGAL HOTEL vs. FIRST SHIP LEASE | REGAL HOTEL vs. FRACTAL GAMING GROUP |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |