Correlation Between Bank of America and Silgan Holdings
Can any of the company-specific risk be diversified away by investing in both Bank of America and Silgan Holdings 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 Silgan Holdings 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 Silgan Holdings, you can compare the effects of market volatilities on Bank of America and Silgan Holdings 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 Silgan Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Silgan Holdings.
Diversification Opportunities for Bank of America and Silgan Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Silgan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Silgan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgan Holdings 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 Silgan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgan Holdings has no effect on the direction of Bank of America i.e., Bank of America and Silgan Holdings go up and down completely randomly.
Pair Corralation between Bank of America and Silgan Holdings
Considering the 90-day investment horizon Bank of America is expected to generate 1.05 times more return on investment than Silgan Holdings. However, Bank of America is 1.05 times more volatile than Silgan Holdings. It trades about 0.05 of its potential returns per unit of risk. Silgan Holdings is currently generating about 0.02 per unit of risk. If you would invest 3,278 in Bank of America on August 24, 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Silgan Holdings
Performance |
| Timeline |
| Bank of America |
| Silgan Holdings |
Bank of America and Silgan Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Silgan Holdings
The main advantage of trading using opposite Bank of America and Silgan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Silgan Holdings 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 Silgan Holdings will offset losses from the drop in Silgan Holdings' long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
| Silgan Holdings vs. Pactiv Evergreen | Silgan Holdings vs. Myers Industries | Silgan Holdings vs. Sonoco Products | Silgan Holdings vs. Avery Dennison Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |