Correlation Between Bank of America and Rail Vision
Can any of the company-specific risk be diversified away by investing in both Bank of America and Rail Vision 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 Rail Vision 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 Rail Vision Ltd, you can compare the effects of market volatilities on Bank of America and Rail Vision 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 Rail Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Rail Vision.
Diversification Opportunities for Bank of America and Rail Vision
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Rail is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Rail Vision Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rail Vision 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 Rail Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rail Vision has no effect on the direction of Bank of America i.e., Bank of America and Rail Vision go up and down completely randomly.
Pair Corralation between Bank of America and Rail Vision
Considering the 90-day investment horizon Bank of America is expected to generate 1.81 times less return on investment than Rail Vision. But when comparing it to its historical volatility, Bank of America is 10.9 times less risky than Rail Vision. It trades about 0.14 of its potential returns per unit of risk. Rail Vision Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Rail Vision Ltd on August 24, 2024 and sell it today you would lose (95.00) from holding Rail Vision Ltd or give up 68.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Rail Vision Ltd
Performance |
| Timeline |
| Bank of America |
| Rail Vision |
Bank of America and Rail Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Rail Vision
The main advantage of trading using opposite Bank of America and Rail Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Rail Vision 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 Rail Vision will offset losses from the drop in Rail Vision's long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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