Correlation Between Bank of America and Amundi SP
Can any of the company-specific risk be diversified away by investing in both Bank of America and Amundi SP 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 Amundi SP 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 Amundi SP 500, you can compare the effects of market volatilities on Bank of America and Amundi SP 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 Amundi SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Amundi SP.
Diversification Opportunities for Bank of America and Amundi SP
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Amundi is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Amundi SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi SP 500 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 Amundi SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi SP 500 has no effect on the direction of Bank of America i.e., Bank of America and Amundi SP go up and down completely randomly.
Pair Corralation between Bank of America and Amundi SP
Considering the 90-day investment horizon Bank of America is expected to generate 1.79 times more return on investment than Amundi SP. However, Bank of America is 1.79 times more volatile than Amundi SP 500. It trades about 0.11 of its potential returns per unit of risk. Amundi SP 500 is currently generating about 0.16 per unit of risk. If you would invest 3,949 in Bank of America on August 29, 2024 and sell it today you would earn a total of 828.00 from holding Bank of America or generate 20.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Bank of America vs. Amundi SP 500
Performance |
| Timeline |
| Bank of America |
| Amundi SP 500 |
Bank of America and Amundi SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Amundi SP
The main advantage of trading using opposite Bank of America and Amundi SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Amundi SP 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 Amundi SP will offset losses from the drop in Amundi SP's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| Amundi SP vs. Amundi Index Solutions | Amundi SP vs. Amundi Index Solutions | Amundi SP vs. Amundi Index Solutions | Amundi SP vs. Amundi SP 500 |
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.
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. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |