Correlation Between Bank of America and Rbb Fund
Can any of the company-specific risk be diversified away by investing in both Bank of America and Rbb Fund 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 Rbb Fund 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 Rbb Fund , you can compare the effects of market volatilities on Bank of America and Rbb Fund 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 Rbb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Rbb Fund.
Diversification Opportunities for Bank of America and Rbb Fund
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Rbb is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Rbb Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund 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 Rbb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbb Fund has no effect on the direction of Bank of America i.e., Bank of America and Rbb Fund go up and down completely randomly.
Pair Corralation between Bank of America and Rbb Fund
Considering the 90-day investment horizon Bank of America is expected to generate 75.03 times more return on investment than Rbb Fund. However, Bank of America is 75.03 times more volatile than Rbb Fund . It trades about 0.27 of its potential returns per unit of risk. Rbb Fund is currently generating about 0.72 per unit of risk. If you would invest 3,940 in Bank of America on August 28, 2024 and sell it today you would earn a total of 835.00 from holding Bank of America or generate 21.19% 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. Rbb Fund
Performance |
| Timeline |
| Bank of America |
| Rbb Fund |
Bank of America and Rbb Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Rbb Fund
The main advantage of trading using opposite Bank of America and Rbb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Rbb Fund 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 Rbb Fund will offset losses from the drop in Rbb Fund's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Rbb Fund vs. First Trust Low | Rbb Fund vs. First Trust Senior | Rbb Fund vs. First Trust TCW | Rbb Fund vs. First Trust Tactical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |