Correlation Between Bank of America and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both Bank of America and CM Hospitalar 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 CM Hospitalar 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 CM Hospitalar SA, you can compare the effects of market volatilities on Bank of America and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and CM Hospitalar.
Diversification Opportunities for Bank of America and CM Hospitalar
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and VVEO3 is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of Bank of America i.e., Bank of America and CM Hospitalar go up and down completely randomly.
Pair Corralation between Bank of America and CM Hospitalar
Considering the 90-day investment horizon Bank of America is expected to generate 0.4 times more return on investment than CM Hospitalar. However, Bank of America is 2.51 times less risky than CM Hospitalar. It trades about 0.09 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.42 per unit of risk. If you would invest 4,540 in Bank of America on November 5, 2024 and sell it today you would earn a total of 90.00 from holding Bank of America or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bank of America vs. CM Hospitalar SA
Performance |
| Timeline |
| Bank of America |
| CM Hospitalar SA |
Bank of America and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and CM Hospitalar
The main advantage of trading using opposite Bank of America and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Royal Bank of | Bank of America vs. Canadian Imperial Bank |
| CM Hospitalar vs. Fidelity National Information | CM Hospitalar vs. Medical Properties Trust, | CM Hospitalar vs. Extra Space Storage | CM Hospitalar vs. Fresenius Medical Care |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |