Correlation Between Bank of America and 1290 Unconstrained
Can any of the company-specific risk be diversified away by investing in both Bank of America and 1290 Unconstrained 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 1290 Unconstrained 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 1290 Unconstrained Bond, you can compare the effects of market volatilities on Bank of America and 1290 Unconstrained 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 1290 Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and 1290 Unconstrained.
Diversification Opportunities for Bank of America and 1290 Unconstrained
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and 1290 is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and 1290 Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Unconstrained Bond 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 1290 Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Unconstrained Bond has no effect on the direction of Bank of America i.e., Bank of America and 1290 Unconstrained go up and down completely randomly.
Pair Corralation between Bank of America and 1290 Unconstrained
Considering the 90-day investment horizon Bank of America is expected to generate 2.07 times more return on investment than 1290 Unconstrained. However, Bank of America is 2.07 times more volatile than 1290 Unconstrained Bond. It trades about 0.06 of its potential returns per unit of risk. 1290 Unconstrained Bond is currently generating about 0.0 per unit of risk. If you would invest 3,085 in Bank of America on August 29, 2024 and sell it today you would earn a total of 1,692 from holding Bank of America or generate 54.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. 1290 Unconstrained Bond
Performance |
| Timeline |
| Bank of America |
| 1290 Unconstrained Bond |
Bank of America and 1290 Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and 1290 Unconstrained
The main advantage of trading using opposite Bank of America and 1290 Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, 1290 Unconstrained 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 1290 Unconstrained will offset losses from the drop in 1290 Unconstrained's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. JPMorgan Chase Co |
| 1290 Unconstrained vs. Versatile Bond Portfolio | 1290 Unconstrained vs. Multisector Bond Sma | 1290 Unconstrained vs. Rbc Bluebay Global | 1290 Unconstrained vs. Prudential Jennison Financial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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