Correlation Between Bank of America and XS Financial
Can any of the company-specific risk be diversified away by investing in both Bank of America and XS Financial 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 XS Financial 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 XS Financial, you can compare the effects of market volatilities on Bank of America and XS Financial 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 XS Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and XS Financial.
Diversification Opportunities for Bank of America and XS Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and XSHLF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and XS Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XS Financial 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 XS Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XS Financial has no effect on the direction of Bank of America i.e., Bank of America and XS Financial go up and down completely randomly.
Pair Corralation between Bank of America and XS Financial
If you would invest (100.00) in XS Financial on November 29, 2024 and sell it today you would earn a total of 100.00 from holding XS Financial or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Bank of America vs. XS Financial
Performance |
| Timeline |
| Bank of America |
| XS Financial |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Bank of America and XS Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and XS Financial
The main advantage of trading using opposite Bank of America and XS Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, XS Financial 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 XS Financial will offset losses from the drop in XS Financial's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| XS Financial vs. Zip Co Limited | XS Financial vs. KYN Capital Group | XS Financial vs. CYIOS | XS Financial vs. Cosmos Group Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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