Correlation Between Bank of America and Semper Mbs
Can any of the company-specific risk be diversified away by investing in both Bank of America and Semper Mbs 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 Semper Mbs 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 Semper Mbs Total, you can compare the effects of market volatilities on Bank of America and Semper Mbs 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 Semper Mbs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Semper Mbs.
Diversification Opportunities for Bank of America and Semper Mbs
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Semper is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Semper Mbs Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semper Mbs Total 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 Semper Mbs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semper Mbs Total has no effect on the direction of Bank of America i.e., Bank of America and Semper Mbs go up and down completely randomly.
Pair Corralation between Bank of America and Semper Mbs
Considering the 90-day investment horizon Bank of America is expected to generate 14.16 times more return on investment than Semper Mbs. However, Bank of America is 14.16 times more volatile than Semper Mbs Total. It trades about 0.31 of its potential returns per unit of risk. Semper Mbs Total is currently generating about 0.3 per unit of risk. If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Semper Mbs Total
Performance |
| Timeline |
| Bank of America |
| Semper Mbs Total |
Bank of America and Semper Mbs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Semper Mbs
The main advantage of trading using opposite Bank of America and Semper Mbs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Semper Mbs 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 Semper Mbs will offset losses from the drop in Semper Mbs' long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Semper Mbs vs. Us Strategic Equity | Semper Mbs vs. Locorr Dynamic Equity | Semper Mbs vs. Sarofim Equity | Semper Mbs vs. Ms Global Fixed |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |