Correlation Between Bank of America and Traction Uranium
Can any of the company-specific risk be diversified away by investing in both Bank of America and Traction Uranium 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 Traction Uranium 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 Traction Uranium Corp, you can compare the effects of market volatilities on Bank of America and Traction Uranium 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 Traction Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Traction Uranium.
Diversification Opportunities for Bank of America and Traction Uranium
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Traction is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Traction Uranium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traction Uranium Corp 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 Traction Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traction Uranium Corp has no effect on the direction of Bank of America i.e., Bank of America and Traction Uranium go up and down completely randomly.
Pair Corralation between Bank of America and Traction Uranium
Considering the 90-day investment horizon Bank of America is expected to under-perform the Traction Uranium. But the stock apears to be less risky and, when comparing its historical volatility, Bank of America is 8.9 times less risky than Traction Uranium. The stock trades about -0.04 of its potential returns per unit of risk. The Traction Uranium Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Traction Uranium Corp on December 1, 2024 and sell it today you would earn a total of 0.00 from holding Traction Uranium Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Traction Uranium Corp
Performance |
| Timeline |
| Bank of America |
| Traction Uranium Corp |
Bank of America and Traction Uranium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Traction Uranium
The main advantage of trading using opposite Bank of America and Traction Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Traction Uranium 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 Traction Uranium will offset losses from the drop in Traction Uranium'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. Royal Bank of |
| Traction Uranium vs. New Age Metals | Traction Uranium vs. York Harbour Metals | Traction Uranium vs. Silver Elephant Mining | Traction Uranium vs. First Energy Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |