Correlation Between Bank of America and Senior Connect
Can any of the company-specific risk be diversified away by investing in both Bank of America and Senior Connect 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 Senior Connect 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 Senior Connect Acquisition, you can compare the effects of market volatilities on Bank of America and Senior Connect 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 Senior Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Senior Connect.
Diversification Opportunities for Bank of America and Senior Connect
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Senior is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Senior Connect Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senior Connect Acqui 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 Senior Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senior Connect Acqui has no effect on the direction of Bank of America i.e., Bank of America and Senior Connect go up and down completely randomly.
Pair Corralation between Bank of America and Senior Connect
If you would invest 3,945 in Bank of America on August 25, 2024 and sell it today you would earn a total of 755.00 from holding Bank of America or generate 19.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 2.22% |
| Values | Daily Returns |
Bank of America vs. Senior Connect Acquisition
Performance |
| Timeline |
| Bank of America |
| Senior Connect Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Senior Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Senior Connect
The main advantage of trading using opposite Bank of America and Senior Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Senior Connect 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 Senior Connect will offset losses from the drop in Senior Connect's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |