Correlation Between Bank of America and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Bank of America and Ubisoft Entertainment 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 Ubisoft Entertainment 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 Ubisoft Entertainment, you can compare the effects of market volatilities on Bank of America and Ubisoft Entertainment 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 Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Ubisoft Entertainment.
Diversification Opportunities for Bank of America and Ubisoft Entertainment
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Ubisoft is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment 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 Ubisoft Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubisoft Entertainment has no effect on the direction of Bank of America i.e., Bank of America and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Bank of America and Ubisoft Entertainment
Considering the 90-day investment horizon Bank of America is expected to generate 0.41 times more return on investment than Ubisoft Entertainment. However, Bank of America is 2.44 times less risky than Ubisoft Entertainment. It trades about 0.13 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about -0.06 per unit of risk. If you would invest 3,036 in Bank of America on August 27, 2024 and sell it today you would earn a total of 1,664 from holding Bank of America or generate 54.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Bank of America vs. Ubisoft Entertainment
Performance |
| Timeline |
| Bank of America |
| Ubisoft Entertainment |
Bank of America and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Ubisoft Entertainment
The main advantage of trading using opposite Bank of America and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Ubisoft Entertainment 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 Ubisoft Entertainment will offset losses from the drop in Ubisoft Entertainment's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Montreal |
| Ubisoft Entertainment vs. Atos SE | Ubisoft Entertainment vs. Dassault Systemes SE | Ubisoft Entertainment vs. Vivendi SA | Ubisoft Entertainment vs. Alstom SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |