Correlation Between Bank of America and ToughBuilt Industries
Can any of the company-specific risk be diversified away by investing in both Bank of America and ToughBuilt Industries 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 ToughBuilt Industries 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 ToughBuilt Industries WT, you can compare the effects of market volatilities on Bank of America and ToughBuilt Industries 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 ToughBuilt Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and ToughBuilt Industries.
Diversification Opportunities for Bank of America and ToughBuilt Industries
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and ToughBuilt is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and ToughBuilt Industries WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ToughBuilt Industries 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 ToughBuilt Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ToughBuilt Industries has no effect on the direction of Bank of America i.e., Bank of America and ToughBuilt Industries go up and down completely randomly.
Pair Corralation between Bank of America and ToughBuilt Industries
If you would invest 3,007 in Bank of America on September 2, 2024 and sell it today you would earn a total of 1,744 from holding Bank of America or generate 58.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Bank of America vs. ToughBuilt Industries WT
Performance |
| Timeline |
| Bank of America |
| ToughBuilt Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and ToughBuilt Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and ToughBuilt Industries
The main advantage of trading using opposite Bank of America and ToughBuilt Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, ToughBuilt Industries 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 ToughBuilt Industries will offset losses from the drop in ToughBuilt Industries' 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 |
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.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |