Correlation Between Bank of America and SHOU HLDGS
Can any of the company-specific risk be diversified away by investing in both Bank of America and SHOU HLDGS 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 SHOU HLDGS 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 SHOU HLDGS LTD, you can compare the effects of market volatilities on Bank of America and SHOU HLDGS 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 SHOU HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and SHOU HLDGS.
Diversification Opportunities for Bank of America and SHOU HLDGS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and SHOU is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and SHOU HLDGS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHOU HLDGS LTD 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 SHOU HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHOU HLDGS LTD has no effect on the direction of Bank of America i.e., Bank of America and SHOU HLDGS go up and down completely randomly.
Pair Corralation between Bank of America and SHOU HLDGS
If you would invest (100.00) in SHOU HLDGS LTD on November 28, 2024 and sell it today you would earn a total of 100.00 from holding SHOU HLDGS LTD or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bank of America vs. SHOU HLDGS LTD
Performance |
| Timeline |
| Bank of America |
| SHOU HLDGS LTD |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Bank of America and SHOU HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and SHOU HLDGS
The main advantage of trading using opposite Bank of America and SHOU HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, SHOU HLDGS 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 SHOU HLDGS will offset losses from the drop in SHOU HLDGS'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 |
| SHOU HLDGS vs. Adtalem Global Education | SHOU HLDGS vs. EMBARK EDUCATION LTD | SHOU HLDGS vs. American Public Education | SHOU HLDGS vs. UNITED UTILITIES GP |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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