Correlation Between Bank of America and Kinetics Internet
Can any of the company-specific risk be diversified away by investing in both Bank of America and Kinetics Internet 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 Kinetics Internet 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 Kinetics Internet Fund, you can compare the effects of market volatilities on Bank of America and Kinetics Internet 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 Kinetics Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Kinetics Internet.
Diversification Opportunities for Bank of America and Kinetics Internet
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Kinetics is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Kinetics Internet Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Internet 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 Kinetics Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Internet has no effect on the direction of Bank of America i.e., Bank of America and Kinetics Internet go up and down completely randomly.
Pair Corralation between Bank of America and Kinetics Internet
Considering the 90-day investment horizon Bank of America is expected to generate 2.34 times less return on investment than Kinetics Internet. But when comparing it to its historical volatility, Bank of America is 1.27 times less risky than Kinetics Internet. It trades about 0.26 of its potential returns per unit of risk. Kinetics Internet Fund is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 9,054 in Kinetics Internet Fund on August 28, 2024 and sell it today you would earn a total of 2,499 from holding Kinetics Internet Fund or generate 27.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Kinetics Internet Fund
Performance |
| Timeline |
| Bank of America |
| Kinetics Internet |
Bank of America and Kinetics Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Kinetics Internet
The main advantage of trading using opposite Bank of America and Kinetics Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Kinetics Internet 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 Kinetics Internet will offset losses from the drop in Kinetics Internet's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Kinetics Internet vs. Victory Munder Multi Cap | Kinetics Internet vs. Tomorrows Scholar College | Kinetics Internet vs. Janus Global Technology | Kinetics Internet vs. Invesco Technology Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |