Correlation Between Bank of America and Satellogic Warrant
Can any of the company-specific risk be diversified away by investing in both Bank of America and Satellogic Warrant 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 Satellogic Warrant 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 Satellogic Warrant, you can compare the effects of market volatilities on Bank of America and Satellogic Warrant 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 Satellogic Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Satellogic Warrant.
Diversification Opportunities for Bank of America and Satellogic Warrant
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Satellogic is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Satellogic Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satellogic Warrant 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 Satellogic Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satellogic Warrant has no effect on the direction of Bank of America i.e., Bank of America and Satellogic Warrant go up and down completely randomly.
Pair Corralation between Bank of America and Satellogic Warrant
Considering the 90-day investment horizon Bank of America is expected to generate 215.45 times less return on investment than Satellogic Warrant. But when comparing it to its historical volatility, Bank of America is 136.49 times less risky than Satellogic Warrant. It trades about 0.13 of its potential returns per unit of risk. Satellogic Warrant is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Satellogic Warrant on August 27, 2024 and sell it today you would lose (2.50) from holding Satellogic Warrant or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 49.19% |
| Values | Daily Returns |
Bank of America vs. Satellogic Warrant
Performance |
| Timeline |
| Bank of America |
| Satellogic Warrant |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Bank of America and Satellogic Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Satellogic Warrant
The main advantage of trading using opposite Bank of America and Satellogic Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Satellogic Warrant 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 Satellogic Warrant will offset losses from the drop in Satellogic Warrant'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 |
| Satellogic Warrant vs. Plexus Corp | Satellogic Warrant vs. Benchmark Electronics | Satellogic Warrant vs. Jabil Circuit | Satellogic Warrant vs. Sanmina |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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