Correlation Between Bank of America and Sturgis Bancorp
Can any of the company-specific risk be diversified away by investing in both Bank of America and Sturgis Bancorp 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 Sturgis Bancorp 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 Sturgis Bancorp, you can compare the effects of market volatilities on Bank of America and Sturgis Bancorp 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 Sturgis Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Sturgis Bancorp.
Diversification Opportunities for Bank of America and Sturgis Bancorp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Sturgis is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Sturgis Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturgis Bancorp 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 Sturgis Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturgis Bancorp has no effect on the direction of Bank of America i.e., Bank of America and Sturgis Bancorp go up and down completely randomly.
Pair Corralation between Bank of America and Sturgis Bancorp
If you would invest 4,182 in Bank of America on September 1, 2024 and sell it today you would earn a total of 569.00 from holding Bank of America or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Bank of America vs. Sturgis Bancorp
Performance |
| Timeline |
| Bank of America |
| Sturgis Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Sturgis Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Sturgis Bancorp
The main advantage of trading using opposite Bank of America and Sturgis Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Sturgis Bancorp 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 Sturgis Bancorp will offset losses from the drop in Sturgis Bancorp's long position.| Bank of America vs. Citigroup | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Sturgis Bancorp vs. FS Bancorp | Sturgis Bancorp vs. Eastern Michigan Financial | Sturgis Bancorp vs. Grand River Commerce | Sturgis Bancorp vs. Bank of Botetourt |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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