Correlation Between Bank of America and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both Bank of America and Svenska Cellulosa 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 Svenska Cellulosa 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 Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on Bank of America and Svenska Cellulosa 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 Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Svenska Cellulosa.
Diversification Opportunities for Bank of America and Svenska Cellulosa
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Svenska is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa 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 Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of Bank of America i.e., Bank of America and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between Bank of America and Svenska Cellulosa
Considering the 90-day investment horizon Bank of America is expected to generate 0.98 times more return on investment than Svenska Cellulosa. However, Bank of America is 1.02 times less risky than Svenska Cellulosa. It trades about 0.05 of its potential returns per unit of risk. Svenska Cellulosa Aktiebolaget is currently generating about 0.01 per unit of risk. If you would invest 3,278 in Bank of America on August 26, 2024 and sell it today you would earn a total of 1,422 from holding Bank of America or generate 43.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bank of America vs. Svenska Cellulosa Aktiebolaget
Performance |
| Timeline |
| Bank of America |
| Svenska Cellulosa |
Bank of America and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Svenska Cellulosa
The main advantage of trading using opposite Bank of America and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Svenska Cellulosa 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 Svenska Cellulosa will offset losses from the drop in Svenska Cellulosa'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 |
| Svenska Cellulosa vs. Svenska Cellulosa Aktiebolaget | Svenska Cellulosa vs. Holmen AB | Svenska Cellulosa vs. Industrivarden AB ser | Svenska Cellulosa vs. Stora Enso Oyj |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |