Correlation Between Bank of America and Amplify Bloomberg
Can any of the company-specific risk be diversified away by investing in both Bank of America and Amplify Bloomberg 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 Amplify Bloomberg 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 Amplify Bloomberg Treasury, you can compare the effects of market volatilities on Bank of America and Amplify Bloomberg 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 Amplify Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Amplify Bloomberg.
Diversification Opportunities for Bank of America and Amplify Bloomberg
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Amplify is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Amplify Bloomberg Treasury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Bloomberg 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 Amplify Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Bloomberg has no effect on the direction of Bank of America i.e., Bank of America and Amplify Bloomberg go up and down completely randomly.
Pair Corralation between Bank of America and Amplify Bloomberg
Considering the 90-day investment horizon Bank of America is expected to generate 2.09 times more return on investment than Amplify Bloomberg. However, Bank of America is 2.09 times more volatile than Amplify Bloomberg Treasury. It trades about 0.35 of its potential returns per unit of risk. Amplify Bloomberg Treasury is currently generating about 0.01 per unit of risk. If you would invest 4,133 in Bank of America on September 3, 2024 and sell it today you would earn a total of 618.00 from holding Bank of America or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Amplify Bloomberg Treasury
Performance |
| Timeline |
| Bank of America |
| Amplify Bloomberg |
Bank of America and Amplify Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Amplify Bloomberg
The main advantage of trading using opposite Bank of America and Amplify Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Amplify Bloomberg 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 Amplify Bloomberg will offset losses from the drop in Amplify Bloomberg's long position.| Bank of America vs. Partner Communications | Bank of America vs. Merck Company | Bank of America vs. Western Midstream Partners | Bank of America vs. Edgewise Therapeutics |
| Amplify Bloomberg vs. Global X Funds | Amplify Bloomberg vs. US Treasury 12 | Amplify Bloomberg vs. Tidal Trust II | Amplify Bloomberg vs. Franklin Liberty Treasury |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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