Correlation Between Bank of America and Surya Biru
Can any of the company-specific risk be diversified away by investing in both Bank of America and Surya Biru 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 Surya Biru 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 Surya Biru Murni, you can compare the effects of market volatilities on Bank of America and Surya Biru 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 Surya Biru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Surya Biru.
Diversification Opportunities for Bank of America and Surya Biru
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Surya is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Surya Biru Murni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Biru Murni 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 Surya Biru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Biru Murni has no effect on the direction of Bank of America i.e., Bank of America and Surya Biru go up and down completely randomly.
Pair Corralation between Bank of America and Surya Biru
Considering the 90-day investment horizon Bank of America is expected to generate 0.99 times more return on investment than Surya Biru. However, Bank of America is 1.01 times less risky than Surya Biru. It trades about 0.11 of its potential returns per unit of risk. Surya Biru Murni is currently generating about -0.13 per unit of risk. If you would invest 3,938 in Bank of America on August 30, 2024 and sell it today you would earn a total of 839.00 from holding Bank of America or generate 21.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Bank of America vs. Surya Biru Murni
Performance |
| Timeline |
| Bank of America |
| Surya Biru Murni |
Bank of America and Surya Biru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Surya Biru
The main advantage of trading using opposite Bank of America and Surya Biru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Surya Biru 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 Surya Biru will offset losses from the drop in Surya Biru's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Royal Bank of | Bank of America vs. Nu Holdings |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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