Correlation Between Bank of America and Us Core
Can any of the company-specific risk be diversified away by investing in both Bank of America and Us Core 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 Us Core 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 Us E Equity, you can compare the effects of market volatilities on Bank of America and Us Core 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 Us Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Us Core.
Diversification Opportunities for Bank of America and Us Core
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and RSQAX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Us E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us E Equity 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 Us Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us E Equity has no effect on the direction of Bank of America i.e., Bank of America and Us Core go up and down completely randomly.
Pair Corralation between Bank of America and Us Core
Considering the 90-day investment horizon Bank of America is expected to generate 2.92 times more return on investment than Us Core. However, Bank of America is 2.92 times more volatile than Us E Equity. It trades about 0.22 of its potential returns per unit of risk. Us E Equity is currently generating about 0.22 per unit of risk. If you would invest 4,265 in Bank of America on August 25, 2024 and sell it today you would earn a total of 435.00 from holding Bank of America or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Us E Equity
Performance |
| Timeline |
| Bank of America |
| Us E Equity |
Bank of America and Us Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Us Core
The main advantage of trading using opposite Bank of America and Us Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Us Core 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 Us Core will offset losses from the drop in Us Core's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Us Core vs. Ab Value Fund | Us Core vs. Delaware Limited Term Diversified | Us Core vs. Semiconductor Ultrasector Profund | Us Core vs. Vanguard Strategic Small 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |