Correlation Between Bank of America and UNITED BUS
Can any of the company-specific risk be diversified away by investing in both Bank of America and UNITED BUS 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 UNITED BUS 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 UNITED BUS SERVICE, you can compare the effects of market volatilities on Bank of America and UNITED BUS 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 UNITED BUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and UNITED BUS.
Diversification Opportunities for Bank of America and UNITED BUS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and UNITED is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and UNITED BUS SERVICE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED BUS SERVICE 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 UNITED BUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED BUS SERVICE has no effect on the direction of Bank of America i.e., Bank of America and UNITED BUS go up and down completely randomly.
Pair Corralation between Bank of America and UNITED BUS
If you would invest 3,940 in Bank of America on August 28, 2024 and sell it today you would earn a total of 835.00 from holding Bank of America or generate 21.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.35% |
| Values | Daily Returns |
Bank of America vs. UNITED BUS SERVICE
Performance |
| Timeline |
| Bank of America |
| UNITED BUS SERVICE |
Bank of America and UNITED BUS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and UNITED BUS
The main advantage of trading using opposite Bank of America and UNITED BUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, UNITED BUS 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 UNITED BUS will offset losses from the drop in UNITED BUS's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| UNITED BUS vs. MCB GROUP LTD | UNITED BUS vs. LOTTOTECH LTD | UNITED BUS vs. NEW MAURITIUS HOTELS | UNITED BUS vs. MIWA SUGAR LIMITED |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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