Correlation Between Bank of America and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Bank of America and PT Sarana 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 PT Sarana 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 PT Sarana Menara, you can compare the effects of market volatilities on Bank of America and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and PT Sarana.
Diversification Opportunities for Bank of America and PT Sarana
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and SMNUF is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Bank of America i.e., Bank of America and PT Sarana go up and down completely randomly.
Pair Corralation between Bank of America and PT Sarana
If you would invest 3,991 in Bank of America on August 29, 2024 and sell it today you would earn a total of 784.00 from holding Bank of America or generate 19.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Bank of America vs. PT Sarana Menara
Performance |
| Timeline |
| Bank of America |
| PT Sarana Menara |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and PT Sarana
The main advantage of trading using opposite Bank of America and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana'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. JPMorgan Chase Co |
| PT Sarana vs. Proximus NV ADR | PT Sarana vs. Singapore Telecommunications Limited | PT Sarana vs. Telstra Limited | PT Sarana vs. MTN Group Ltd |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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