Correlation Between Bank of America and Sailfish Royalty
Can any of the company-specific risk be diversified away by investing in both Bank of America and Sailfish Royalty 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 Sailfish Royalty 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 Sailfish Royalty Corp, you can compare the effects of market volatilities on Bank of America and Sailfish Royalty 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 Sailfish Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Sailfish Royalty.
Diversification Opportunities for Bank of America and Sailfish Royalty
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Sailfish is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Sailfish Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sailfish Royalty Corp 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 Sailfish Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sailfish Royalty Corp has no effect on the direction of Bank of America i.e., Bank of America and Sailfish Royalty go up and down completely randomly.
Pair Corralation between Bank of America and Sailfish Royalty
Considering the 90-day investment horizon Bank of America is expected to generate 0.55 times more return on investment than Sailfish Royalty. However, Bank of America is 1.83 times less risky than Sailfish Royalty. It trades about 0.26 of its potential returns per unit of risk. Sailfish Royalty Corp is currently generating about -0.15 per unit of risk. If you would invest 4,262 in Bank of America on August 27, 2024 and sell it today you would earn a total of 488.00 from holding Bank of America or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Sailfish Royalty Corp
Performance |
| Timeline |
| Bank of America |
| Sailfish Royalty Corp |
Bank of America and Sailfish Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Sailfish Royalty
The main advantage of trading using opposite Bank of America and Sailfish Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Sailfish Royalty 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 Sailfish Royalty will offset losses from the drop in Sailfish Royalty's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal | Bank of America vs. Bank of Nova |
| Sailfish Royalty vs. Angkor Resources Corp | Sailfish Royalty vs. Advance Gold Corp | Sailfish Royalty vs. Minnova Corp | Sailfish Royalty vs. Argo Gold |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |