Correlation Between Bank of America and SpringBig Holdings
Can any of the company-specific risk be diversified away by investing in both Bank of America and SpringBig Holdings 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 SpringBig Holdings 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 SpringBig Holdings, you can compare the effects of market volatilities on Bank of America and SpringBig Holdings 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 SpringBig Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and SpringBig Holdings.
Diversification Opportunities for Bank of America and SpringBig Holdings
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and SpringBig is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and SpringBig Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringBig Holdings 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 SpringBig Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringBig Holdings has no effect on the direction of Bank of America i.e., Bank of America and SpringBig Holdings go up and down completely randomly.
Pair Corralation between Bank of America and SpringBig Holdings
Considering the 90-day investment horizon Bank of America is expected to generate 11.49 times less return on investment than SpringBig Holdings. But when comparing it to its historical volatility, Bank of America is 13.81 times less risky than SpringBig Holdings. It trades about 0.06 of its potential returns per unit of risk. SpringBig Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.00 in SpringBig Holdings on August 29, 2024 and sell it today you would lose (3.80) from holding SpringBig Holdings or give up 76.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 25.05% |
| Values | Daily Returns |
Bank of America vs. SpringBig Holdings
Performance |
| Timeline |
| Bank of America |
| SpringBig Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and SpringBig Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and SpringBig Holdings
The main advantage of trading using opposite Bank of America and SpringBig Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, SpringBig Holdings 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 SpringBig Holdings will offset losses from the drop in SpringBig Holdings' long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| SpringBig Holdings vs. Dave Warrants | SpringBig Holdings vs. SoundHound AI | SpringBig Holdings vs. Swvl Holdings Corp | SpringBig Holdings vs. WM Technology |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| 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 | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |