Correlation Between Bank of America and Sit Dividend
Can any of the company-specific risk be diversified away by investing in both Bank of America and Sit Dividend 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 Sit Dividend 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 Sit Dividend Growth, you can compare the effects of market volatilities on Bank of America and Sit Dividend 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 Sit Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Sit Dividend.
Diversification Opportunities for Bank of America and Sit Dividend
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Sit is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Sit Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Dividend Growth 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 Sit Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Dividend Growth has no effect on the direction of Bank of America i.e., Bank of America and Sit Dividend go up and down completely randomly.
Pair Corralation between Bank of America and Sit Dividend
Considering the 90-day investment horizon Bank of America is expected to under-perform the Sit Dividend. In addition to that, Bank of America is 1.74 times more volatile than Sit Dividend Growth. It trades about -0.06 of its total potential returns per unit of risk. Sit Dividend Growth is currently generating about 0.09 per unit of volatility. If you would invest 1,619 in Sit Dividend Growth on November 22, 2024 and sell it today you would earn a total of 18.00 from holding Sit Dividend Growth or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Sit Dividend Growth
Performance |
| Timeline |
| Bank of America |
| Sit Dividend Growth |
Bank of America and Sit Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Sit Dividend
The main advantage of trading using opposite Bank of America and Sit Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Sit Dividend 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 Sit Dividend will offset losses from the drop in Sit Dividend'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. Royal Bank of |
| Sit Dividend vs. Matthews Asia Dividend | Sit Dividend vs. Sit Dividend Growth | Sit Dividend vs. Jpmorgan Unconstrained Debt | Sit Dividend vs. Harbor Vertible Securities |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |