Correlation Between Bank of America and XWELL
Can any of the company-specific risk be diversified away by investing in both Bank of America and XWELL 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 XWELL 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 XWELL Inc, you can compare the effects of market volatilities on Bank of America and XWELL 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 XWELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and XWELL.
Diversification Opportunities for Bank of America and XWELL
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and XWELL is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and XWELL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XWELL Inc 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 XWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XWELL Inc has no effect on the direction of Bank of America i.e., Bank of America and XWELL go up and down completely randomly.
Pair Corralation between Bank of America and XWELL
Considering the 90-day investment horizon Bank of America is expected to generate 0.3 times more return on investment than XWELL. However, Bank of America is 3.38 times less risky than XWELL. It trades about 0.05 of its potential returns per unit of risk. XWELL Inc is currently generating about -0.05 per unit of risk. If you would invest 3,278 in Bank of America on August 25, 2024 and sell it today you would earn a total of 1,422 from holding Bank of America or generate 43.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. XWELL Inc
Performance |
| Timeline |
| Bank of America |
| XWELL Inc |
Bank of America and XWELL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and XWELL
The main advantage of trading using opposite Bank of America and XWELL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, XWELL 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 XWELL will offset losses from the drop in XWELL's long position.| Bank of America vs. Toronto Dominion Bank | Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Canadian Imperial Bank |
| XWELL vs. Mister Car Wash | XWELL vs. Interactive Strength Common | XWELL vs. Goodfood Market Corp | XWELL vs. Frontdoor |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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