Correlation Between Bank of America and Wesure Global
Can any of the company-specific risk be diversified away by investing in both Bank of America and Wesure Global 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 Wesure Global 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 Wesure Global Tech, you can compare the effects of market volatilities on Bank of America and Wesure Global 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 Wesure Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Wesure Global.
Diversification Opportunities for Bank of America and Wesure Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Wesure is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Wesure Global Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesure Global Tech 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 Wesure Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesure Global Tech has no effect on the direction of Bank of America i.e., Bank of America and Wesure Global go up and down completely randomly.
Pair Corralation between Bank of America and Wesure Global
Considering the 90-day investment horizon Bank of America is expected to generate 3.25 times less return on investment than Wesure Global. But when comparing it to its historical volatility, Bank of America is 2.33 times less risky than Wesure Global. It trades about 0.11 of its potential returns per unit of risk. Wesure Global Tech is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 31,200 in Wesure Global Tech on August 29, 2024 and sell it today you would earn a total of 17,020 from holding Wesure Global Tech or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 74.4% |
| Values | Daily Returns |
Bank of America vs. Wesure Global Tech
Performance |
| Timeline |
| Bank of America |
| Wesure Global Tech |
Bank of America and Wesure Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Wesure Global
The main advantage of trading using opposite Bank of America and Wesure Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Wesure Global 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 Wesure Global will offset losses from the drop in Wesure Global's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Wesure Global vs. Brainsway | Wesure Global vs. Mivne Real Estate | Wesure Global vs. Photomyne | Wesure Global vs. Bezeq Israeli Telecommunication |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges |